Meet MuleHunter AI, RBI's solution to rising mule account fraud
The Reserve Bank of India Innovation Hub (RBIH), a wholly-owned subsidiary of the Reserve Bank of India (RBI), has launched MuleHunter AI, an advanced artificial intelligence and machine learning model. This technology, first unveiled in August, aims to revolutionize fraud detection by leveraging AI/ML technologies. Today, RBI Governor Shaktikanta Das announced the decision to expand MuleHunter AI to more banks and financial institutions, tightening the noose around mule accounts.
MuleHunter AI outperforms traditional systems in fraud detection
MuleHunter AI has already proven to be more effective than conventional rule-based systems in identifying suspicious accounts. Its application has already been successfully demonstrated in two public sector banks. The RBI is actively working with banks and stakeholders to enhance the financial system's defenses against digital fraud, with MuleHunter AI being a significant outcome of these efforts.
Banks encouraged to refine the tech
The RBI is pushing banks to work with RBIH to further fine-tune the MuleHunter AI model. Acknowledging the game-changing capabilities of technologies such as AI, the RBI has also proposed a Framework for Responsible and Ethical Enablement of AI (FREE-AI) in the financial sector. The move would focus on tackling risks like algorithmic bias and data privacy issues while leveraging its advantages.
RBI to form expert committee for responsible AI use
The RBI intends to set up an expert committee to create a strong and flexible framework for responsible AI use in finance. This is viewed as a key move to address risks at the onset of the adoption cycle and promote ethical, effective use of AI technologies. Mule accounts, commonly linked to money laundering and other illegal activities, function under fake identities or third-party names to mask the trail of dirty money.
MuleHunter AI aims to strengthen defenses against digital fraud
By improving detection and enhancing traceability, MuleHunter AI hopes to bolster the financial system's defenses against digital fraud. The RBI is working closely with the Indian Cyber Crime Control Centre (I4C) under the Ministry of Home Affairs (MHA) and other regulatory agencies to tackle the rising tide of online financial crimes. Online financial frauds made up 67.8% of all cybercrime complaints in Q2 2025, according to National Crime Records Bureau (NCRB) data.
