Fraudsters Use ‘Rented Bank Accounts’ To Drain Crores As Police Struggle With Investigations

 

Kathmandu: A normal family in Chitwan. Sixteen-year-old Milan Sharma (name changed) lived a normal life. He went to school. He helped his parents at their small shop during his free time. The rest of the day was spent studying. Milan was preparing for the SEE. When he turned 16, his life took a sudden turn. What seemed like a milestone soon became a curse.

After reaching the legal age, his parents arranged his citizenship. A person connected to a relative living nearby learned about it. That uncle soon began tempting Milan. “Now you have citizenship. You should open a bank account. You will get some expenses too,” he said. Milan, a Class 10 student, was lured by the idea of earning his own pocket money. He wanted to stop asking his parents for small amounts. Hoping to become self-reliant, he agreed.

At his uncle’s insistence, Milan first obtained a SIM card in his own name. He then went to a bank and opened an account. The process did not end there. He applied for an ATM card. He activated mobile banking and internet banking. The uncle paid all the expenses related to opening the account.

Once everything was ready, Milan handed over the checkbook, ATM card, mobile banking password, and the SIM card linked to the account to his uncle. As agreed, the uncle started paying him Rs 10,000 every month. In three months, Milan received Rs 30,000. He was stunned. The money felt like a reward. But the happiness was short-lived.

One day, the ward chair arrived looking for him. Questions began about the bank account. Frightened, Milan told the truth. What emerged shocked the entire family. The account had been used for online fraud. In just three months, transactions worth more than Rs 30 million had passed through the account of the 16-year-old.

Milan’s parents had no idea their son’s account was being used for a crime worth crores. Panicked, his mother brought him to the Cyber Bureau in Kathmandu. Explaining the case, Cyber Bureau spokesperson and Superintendent of Police Deepak Raj Awasthi told TechPana, “The account was misused to defraud people of crores of rupees. The boy became part of a serious crime after falling for the lure of small pocket money.”

This is not just Milan’s story. The experience of 22-year-old Rakesh Yogi (name changed) from Kailali is similar. Rakesh was pursuing graduation studies. He developed an interest in the stock market. His knowledge, however, was almost zero. He did not know what an IPO was or how share trading worked. A relative exploited this gap.

“Give me your bank account and SIM. I will apply for shares in your name. I will also invest,” the relative told him. For Rakesh, who dreamed of earning from the stock market, the offer sounded ideal. He never imagined it would land him in police custody within four months.

After receiving a call from the police, Rakesh went to the station with his mother. What he learned there shocked him. Money his family, who survive on labor work in India, would never see in a lifetime had passed through his account. More than Rs 15 million had been transacted in four months. The money belonged to victims of online fraud. Superintendent of Police Awasthi said, “His relatives handed over the account to an online fraud gang in the name of helping him trade shares. This amount is unimaginable for a family dependent on daily labor.”

Another case shows how deep the network runs. Twenty-four-year-old Anisha Sharma (name changed) from Sunsari received a simple ‘hi’ on WhatsApp from an unknown number. It slowly turned into regular conversation. The man later asked for help. He said his account had a limit on receiving money from abroad.

“My brother will send money to your account. You just transfer it to another account,” he told her. Anisha agreed. Money started coming into her account. She transferred it as instructed. In a week, transactions crossed Rs 1 million.

When she tried to stop, saying it was affecting her work and studies, the offer changed. She was promised a commission. “Rs 2,000 for every Rs 100,000 transaction,” he said. Greed trapped her. After two and a half months, her account was blocked. At the bank, she learned that a complaint had been filed accusing her account of being used for online fraud.

The money supposedly coming from abroad actually belonged to scam victims. During that period, transactions exceeded Rs 5 million. Kathmandu Valley Crime Investigation Office spokesperson and Superintendent of Police Kazi Kumar Acharya said, “They lure people with help and commissions. It is a combination of emotional manipulation and financial temptation.”

These cases reflect the rapid spread of ‘rented bank accounts,’ also known as ‘mule accounts’ or ‘money mules,’ in Nepal. The issue runs even deeper. Cyber Bureau investigations have uncovered shocking findings. In one fraud case, the bank account holder’s citizenship details were completely fake. The citizenship number, photo, and identity did not exist. Yet the account was active.

“The person matching that citizenship does not exist. But the account is active and transactions worth lakhs were made,” Superintendent of Police Awasthi said. “It has become extremely difficult to trace the real perpetrator.” Such ‘ghost accounts’ raise serious questions about banking security systems.

Online fraud is becoming increasingly complex. Sanjeev Sharma from Saptari responded to a Facebook advertisement that promised, “Earn thousands of rupees a day from home.” After joining a Telegram group, he was contacted by someone posing as a foreign company representative. He was asked for his bank QR code. He was promised Rs 500 as commission for transferring money.

After transferring Rs 300,000, his account was shut down. Later, it was revealed that the money came from a hacked F1 Soft bank account. A case filed by F1 Soft International on December 19, 2081, named 22 people as defendants. Between October 1 and 4, 2024, Rs 33.95 million was stolen from F1 Soft’s Citizens Bank account. The money flowed into the accounts of 22 money mules like Sanjeev.

Cyber Bureau data shows a sharp rise in online fraud. In fiscal year 2079/80, 1,815 complaints were registered. The number rose to 4,133 in 2080/81. It reached 7,728 in 2081/82. In the first four months of the current fiscal year alone, more than 2,400 complaints have already been filed.

Kathmandu Valley Crime Investigation Office data shows a similar trend. In fiscal year 2079/80, 1,450 applications were filed. In 2080/81, the number rose to 1,667. By Chaitra 31 of fiscal year 2081/82, 1,397 applications had already been registered.

Fraudsters target the public using excuses such as lottery winnings, parcel taxes, cheap product offers, Facebook hacks, wallet OTP theft, foreign employment, and inheritance claims. All these crimes rely on rented bank accounts. Criminals avoid using their own accounts. They use the accounts of gullible or greedy individuals. The money is later sent abroad through cryptocurrency or hundi.

What are regulators and police doing? Speaking to TechPana, Nepal Rastra Bank spokesperson Guru Prasad Poudel said the issue is being taken seriously. “Point number 121 of the current fiscal year’s monetary policy mandates a study on dormant accounts and money mules. That study is underway,” he said.

Poudel said policies have been tightened. Biometric ID or National ID has been made mandatory for account opening. “This ensures unique identification,” he said. He added that banks are updating KYC details and closing suspicious accounts. “Accounts with unusual structures or those under investigation are being blocked or closed.”

He said banks monitor transactions based on declared annual limits. “If someone declares an annual transaction of Rs 1 million but transacts Rs 10 million, it should trigger suspicion,” he said. He stressed that low financial literacy remains a major challenge and urged people not to let others use their accounts.

Cyber Bureau spokesperson Awasthi highlighted practical difficulties. He pointed to weaknesses in account-opening procedures. “Verification must be technology-driven. Bank staff must ensure the person matches the documents,” he said. He warned that trust-based account opening, especially in remote branches, increases risk. “When punishment comes, the innocent account holder gets trapped,” he said.

Awasthi called for an alarm system. “If an account with a Rs 5 lakh limit suddenly transacts Rs 20 to 30 lakh in a day, the system should flag it immediately,” he said. He emphasized the role of frontline bank staff in warning customers. He also said the absence of an integrated monitoring system allows people to open multiple accounts across banks within a short time.

Fintech expert and founder of Fintech Kathmandu, Sanjeev Subba, said mule accounts are an industry-wide problem. “This is the biggest headache in banking today,” he told TechPana. He said a Fraud Risk Management system or rule-based engine is needed.

Subba explained how money flows. “Stolen money first goes to a mule account. Within minutes, it moves through several layers and is finally cashed out. This makes tracking difficult,” he said. Manual monitoring is impossible. He said AI- or data-driven mule account trackers can flag suspicious activity in real time.

However, he said a single bank cannot solve the problem. A centralized system is required. “Once money leaves my bank, it is beyond my jurisdiction,” he said. He suggested that Nepal Clearing House Limited could develop an industry-level fraud tracking engine, similar to systems used in India.

“If such a system is developed, Nepal will truly move toward real fintech,” Subba said. He added that preventing fraud within the system is far more effective than trying to recover stolen money later.

 

पछिल्लो अध्यावधिक: मंसिर २८, २०८२ १३:५५

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