Context:
Union Ministry of Home Affairs has issued an alert about illegal payment gateways using mule bank accounts for money laundering.
Mule Accounts:
- Bank accounts that receive funds from illegal activities and transfer them to other accounts
- Serve as a bridge for money laundering and other illicit activities.
- Various types of money mules –
- Victim Mule – Unknowingly involved, their account is compromised for laundering money.
- Deceiver Mule – Aware of fraudulent use but misled about the transactions.
- Accomplice Mule – Opens a new account for fraudulent transactions.
- Peddler – Sells their account to fraudsters.
- Opportunist – Uses existing accounts for illegal money transfers.
- Cybercriminals use accounts of shell companies and individuals as mule accounts, exploiting the bulk payout facility provided by banks.
- Shell company – A company without active business operations or significant assets.
- Not necessarily illegal, but they can be used illegitimately to conceal business ownership from law enforcement or the public.
- Bulk Payout facility – Facility offered by banks allowing businesses and organisations to make multiple payments to various beneficiaries in a single transaction.
Source: Business Standard
Previous Year Question
Which one of the following effects of creation of black money in India has been the main cause of worry to the Government of India?
[UPSC Civil Service Exam – 2021 Prelims]
(a) Diversion of resources to the purchase of real estate and investment in luxury housing
(b) Investment in unproductive activities and purchase of precious stones, jewelry, gold, etc.
(c) Large donations to political parties and growth of regionalism
(d) Loss of revenue to the State Exchequer due to tax evasion
Answer: (d)