Ajay, a college student from Pune, became an unwitting accomplice in a sophisticated money-laundering operation after losing his part-time job during the Covid-19 pandemic.
In search of income, he responded to a message on Telegram promising quick returns ₹5,000 per week to “lend” his bank account for a few transactions.
The convener assured Ajay there was “no risk,” needing only his account as a conduit to receive payments.
Tempted by desperation and the apparent simplicity of the offer, Ajay shared his bank account details and allowed remote access to his UPI and net banking credentials.
Within days, significant sums ranging from ₹80,000 to ₹1.2 lakh began arriving in his account and were immediately withdrawn or redirected.
According to the Report, the activity quickly drew scrutiny from his bank, which then froze his account.
Soon after, Ajay was contacted by the local cyber cell, which informed him that his account had been used to channel funds derived from a phishing scam targeting elderly individuals.
Ajay’s experience illustrates the anatomy of the ‘rent-a-bank-account’ scam a growing threat impacting thousands of unsuspecting citizens each month.
Sophisticated Laundering Mechanism
The scam operates by recruiting everyday individuals to serve as transaction intermediaries, thereby obscuring the origins and destinations of illicit funds.
According to Amit Relan, co-founder and CEO of mFilterIt, these fraud networks typically lure individuals with the promise of easy money.
Once recruited, their personal bank accounts become ‘drop points’ for illegal proceeds from GST fraud, shell company transactions, phishing, gambling, and even operations tied to dark web activity.
In most cases, the account owner is paid a nominal commission, all the while unaware of the true scale or criminal source of the transactions.
Nevertheless, because the account is in their name, legal liability rests squarely on them, exposing them to charges of money laundering and abetting financial crime.
Industry leaders warn that what appears to be an innocuous side gig can rapidly escalate into serious legal peril.
Relan stresses that these scams not only facilitate financial fraud but also pose national security risks.
In several cases, such accounts have been traced to transactions linked to organized crime syndicates and, in rare instances, terror financing.
Once flagged, these bank accounts are blacklisted ruining the holder’s credit profile and jeopardizing any future engagement with the formal banking sector.
Call for Enhanced Oversight
The scale of the problem is striking. By some estimates, 50,000 to 100,000 such intermediary accounts are identified monthly, signaling a persistent vulnerability in India’s financial ecosystem.
Ashish Singhal, CEO of the India Blockchain Development and Innovation Council (IBDIC), underscores that the challenge transcends routine fraud.
He describes the phenomenon as a “systemic vulnerability” necessitating cross-sector cooperation between telecom operators, banks, and fintech firms.
Experts argue that combating this menace will require more than regulatory directives and improved Know Your Customer (KYC) controls.
There is a crucial need for continuous, hyper-local awareness campaigns delivered in vernacular languages to ensure individuals recognize the risks of lending out their accounts.
Additionally, real-time intelligence sharing between banks, telecom service providers, and enforcement agencies is essential for identifying emerging scam methodologies and compromised accounts.
Until such multi-pronged measures are implemented, the rent-a-bank-account scam will continue to exploit vulnerable citizens, erode public trust in digital transactions, and compromise the integrity of India’s financial infrastructure.
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