RBI Update: Banking sector regulator Reserve Bank of India Governor Shaktikanta Das has asked public and private sector banks to speed up their action against mule accounts. The RBI Governor has asked banks to intensify awareness campaigns for customers, educate them and take concrete steps to prevent digital fraud.
Instructions for action against mule accounts
On Wednesday, July 3, 2024, the RBI Governor held a meeting with the Managing Directors and CEOs of public sector banks and private banks in Mumbai. And in this meeting, the RBI Governor has asked to take action against Mule Accounts. Mule Accounts are such bank accounts through which unethically earned money is received or transferred to the account. This makes it easier to transfer money illegally.
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improving the performance of banks
In the meeting, the RBI Governor said that banks’ asset quality, loan provisioning, capital adequacy ratio and profitability are seeing consistent improvement. Referring to the strength and greater flexibility of the banking sector, he emphasized on further strengthening governance standards, risk management practices and compliance culture in banks. The RBI Governor emphasized on improving cyber security control in banks and dealing with third party risks in a better way.
There was also discussion on the increasing digital fraud
The gap between credit and deposit in banks, issues related to liquidity risk management and ALM and the trend of unsecured retail lending were discussed in the meeting. Cyber security, third party risk and dealing with digital fraud were also discussed in detail in the meeting. Emphasis was laid in the meeting on providing more loans to MSMEs, emphasis on the use of Indian rupee for cross-border transactions and participation of banks in RBI’s initiatives related to innovation.
