New Delhi [India], July 26 : Fraudsters targeting Indian consumers are now increasingly using India-based money mule accounts instead of overseas accounts to move stolen money, as crackdowns on scam centres in Southeast Asia force them to change their methods, according to BioCatch's Digital Banking Fraud Trends in India 2026 report.
The report said that over the past two years, there has been "a noticeable shift" in where proceeds from fraud and scams are routed.
It said, "Previously, mule accounts receiving these transfers were located in other countries across Southeast Asia. Our data now shows a substantial increase in transfers to potential lower-level mule accounts within India."
According to the report, enforcement actions led by the United Nations Office on Drugs and Crime (UNODC) against scam centres in Myanmar, Cambodia and Laos have displaced, rather than dismantled, fraud networks.
"The operating model has become more distributed, supported by wider money-laundering networks, data brokers, malware providers, deepfake and AI-driven services, and other crime-as-a-service facilitators," the report said. It added that these syndicates are increasingly relying on local cash-out infrastructure in India, including mule accounts, payment rails, devices and SIM cards.
BioCatch said most scam centre operations now depend on recruiting lower-level mules and mule handlers within India. According to the report, this "mule-as-a-service" infrastructure ultimately consolidates stolen funds, converts them into cryptocurrency and routes them to wallets associated with scam centres.
BioCatch said mule accounts often appear legitimate because they belong to real customers using valid credentials and authorised transactions. However, the report said suspicious activity becomes apparent only when banks analyse behavioural, session, device and network intelligence together rather than viewing transactions in isolation.
The findings come as the government has stepped up efforts to curb the use of mule accounts in cyber fraud. In May this year, the Indian Cyber Crime Coordination Centre (I4C) under the Ministry of Home Affairs signed a Memorandum of Understanding with the Reserve Bank Innovation Hub (RBIH) to strengthen AI-based detection of mule accounts through intelligence sharing from the I4C's Suspect Registry. At the event, Union Home Minister Amit Shah said that "mule accounts are big hurdles in curbing cybercrimes."
According to a Lok Sabha reply by the Ministry of Home Affairs, as of January 31, 2026, the I4C's Suspect Registry had identified and shared details of 27.37 lakh Layer-1 mule accounts with participating entities, helping prevent transactions worth more than Rs 9,518 crore.
"With mule networks becoming more organised, proactive detection will depend on connecting behavioural, device, and network intelligence in real time," the report said, adding that banks need to detect mule activity much earlier in the account lifecycle to prevent fraud before customers lose money.