In a decisive move to curb the misuse of anonymous bank accounts in cyber fraud and money laundering, the government is preparing to penalize repeated high-value transactions in accounts without PAN (Permanent Account Number). The Financial Intelligence Unit (FIU) and central tax agencies have flagged concerns that such accounts are frequently used to route illicit funds linked to online scams and ransomware attacks.
Over 75,000 Cyber Fraud Cases Reported Till May 2024; Money Often Routed Through Unverified Accounts
According to officials, more than 75,000 cyber fraud cases have been reported across the country in the first five months of 2024 alone. Many of these crimes involve routing funds through multiple unverified bank accounts, often opened without PAN or Aadhaar linkage.
Such accounts are now under surveillance, especially if they demonstrate unusual deposit and withdrawal patterns, such as repeated transfers without clear economic activity.
Banks Seek Authority to Freeze Suspicious Accounts Involved in Fraudulent Transactions
In response, several banks have submitted requests to the government seeking the legal right to freeze bank accounts that are repeatedly used for questionable fund flows. They are also demanding clearer guidelines from tax and central agencies to identify and restrict such accounts automatically.
Currently, most suspicious accounts are allowed to remain operational even after being flagged, due to the lack of direct regulatory powers granted to banks.
PAN or Aadhaar Mandatory for Frequent Large Transactions; Accounts to Be Monitored More Closely
The Income Tax Department and investigative agencies have jointly recommended that all accounts with high-volume or high-frequency transactions must be linked with verified PAN or Aadhaar. Officials estimate that over 60 crore active bank accounts are already PAN or Aadhaar-linked, but millions remain unverified, especially in rural and semi-urban branches.
These unverified accounts often act as conduits in organized financial crimes, especially in phishing attacks, fake job scams, and UPI frauds.
Stringent Oversight for Accounts Without Clear Source of Income or KYC
Going forward, any account without PAN that shows unexplained cash inflow, wallet transfers, or crypto-linked payments will be subject to strict scrutiny. The government is also considering issuing a circular authorizing banks to withhold transactions or temporarily suspend accounts flagged as high-risk until proper documentation is submitted.
