Fraud Briefing

The Reserve Bank of India has issued draft KYC Amendment Directions, 2026, mandating banks and UCBs to place immediate temporary debit holds (up to 60 days) on accounts flagged as suspected money mules by AI/ML transaction-monitoring systems, in compliance with a Supreme Court order dated August 4, 2026. The SOP is open for public comment until October 2, 2026 and is proposed to take effect from April 1, 2027.

Alfara'a Infraprojects obtained Rs 360.50 crore in credit facilities from Bank of Baroda, then opened Letters of Credit worth Rs 75.02 crore and Bank Guarantees worth Rs 164.59 crore under the guise of tile exports that were never executed. When invoked or devolved, funds were remitted to shell entities in Singapore and Hong Kong, then layered back through Indian intermediaries to AIPL and group entities to conceal proceeds of crime, causing Bank of Baroda to classify the account as NPA with Rs 255.74 crore outstanding.

Bank of Baroda classified the Alfara'a Infraprojects credit facility as an NPA with Rs 255.74 crore outstanding. ED searches uncovered layered fund routing through international shell entities in Singapore and Hong Kong. The agency seized Rs 18 lakh in cash and foreign currency, and froze fixed deposits including Rs 1.02 crore, 1.75 crore Japanese yen, and USD 103,145 alongside banking records and digital devices.