SBI Cracks Down on Dormant Accounts to Curb Cyber Frauds
State Bank of India (SBI) is tightening controls on inoperative savings accounts with zero balances to reduce the risk of cyber fraud and prevent dormant accounts from being misused as mule accounts. The bank plans to close eligible accounts that have remained inactive and unfunded for extended periods if customers do not update their KYC details within the specified notice period.
Under the initiative, savings accounts with nil balances for more than one year may be closed after a one-month notice if customers fail to update their KYC information. Separately, banking regulations classify accounts as inoperative when there have been no customer-induced transactions for more than two years. Customers can reactivate such accounts by completing KYC requirements through SBI branches or digital channels including YONO.
SBI has also developed a dashboard to monitor non-funded accounts and facilitate reactivation of dormant accounts containing more than ₹10,000. The initiative comes amid concerns that fraudsters can exploit neglected accounts to receive and transfer illicit funds.
The wider threat is significant. Government data cited in the report indicates that the Indian Cybercrime Coordination Centre has identified 2.64 million first-layer mule accounts, while the CBI’s Operation Chakra-V identified around 850,000 suspected mule accounts across more than 700 branches.
The move highlights the growing importance of account lifecycle management, KYC controls, mule-account detection and transaction monitoring in banks’ cyber-fraud and financial-crime risk frameworks.
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