Indian banks are seeing operational risks tilt from loan accounts to deposit accounts as the rise in mule accounts and money laundering forces stricter scrutiny of customers. Senior bankers said that deposit mobilisation, once considered low-risk, has now become a major operational challenge.“Large amounts of operational risks are coming from liability accounts which need to be taken care of, and this was not that important earlier. Today, opening a loan account seems safer than opening a deposit account,” said State Bank of India chairman CS Setty at a banking event in Mumbai, according to ET.He added, “You have the issue of mule accounts, the issue of wrong transactions happening and this is central to our customer protection.”A mule account refers to a bank account used by fraudsters to launder illicit funds or move stolen money. In late June, the Central Bureau of Investigation (CBI) identified around 8.5 lakh mule accounts across more than 700 branches nationwide that were being exploited by cybercriminals, according to PTI.The due diligence for opening deposit accounts has now become more stringent. Banks are deploying tighter know-your-customer (KYC) checks, monitoring early transactions, and intensifying vigilance to mitigate risks. “The due diligence when opening bank accounts is becoming more stringent as compared to what it was some years ago… When it comes to loans or the asset part for banks, most of the products are structured where risk mitigation measures are in place and thus, related challenges in loan accounts are lower,” Sanjay Mudaliar, executive director at Bank of Baroda, was quoted as saying by ET.The Reserve Bank of India has also stepped in to strengthen oversight. In December 2024, it directed banks to participate in its MuleHunter.AI initiative to detect and eliminate mule accounts.As per PTI, at least 15 more banks are set to adopt MuleHunter over the next two months, adding to the six lenders already on board. The AI-driven platform is designed to identify fraudulent accounts with a higher accuracy rate and is being provided free of cost to banks.A senior bank official cited by ET said that competition for deposits, particularly against mutual funds, has added pressure on lenders to meet mobilisation targets, making the task of screening and eliminating mule accounts even more challenging.In recent months, banks have started reviewing real-time transactions for unusual patterns and training staff to recognise suspicious behaviour as part of efforts to counter the threat.