As Prime Minister Narendra Modi’s government completes two years in power, the NDA’s progress report celebrates the fact that nearly 22 crore bank accounts have been opened under the Pradhan Mantri Jan Dhan Yojna. But the RBI has warned that these newly opened accounts could be “very vulnerable” to misuse for “money muling”.

Speaking at a conference of bank officials, RBI Deputy Governor SS Mundra cautioned: “In a recent episode, it was observed that an idle account was used for receiving and transferring large funds without the knowledge of account holder. The fact came to light only when authorities served a notice to the account holder.”

The RBI blames the banks’ system and processes for poor monitoring of these accounts. The central banker has asked banks to be on guard against such practices.

“Kite-flyers and ponzi scheme operators also sometimes use mule accounts to swindle public money. Banks need to create a robust system to monitor transactions,” Mr Mundra added.

According to the RBI, existing system of alerts and exception transaction reporting mechanisms are primitive and generally ineffective against frauds.

It has now warned that failure to guard against misuse of customers’ accounts may result in banks incurring supervisory sanctions and enforcement action.

Banks have also been warned against high service charges and penalty for negative balance in saving accounts. They have also been told to stop seeking proof of local address to open bank accounts. The central bank also reiterated the need of using any permanent address to open accounts and Know Your Customer (KYC) purpose.

In what can be a breakthrough in empowering customers, the RBI – with the Indian Banks Association or IBA – is working on a standardised form for customers wanting to open bank accounts. The new guidelines may highlight the list of documents which can be offered as proof and for KYC purposes by customers. This, the RBI says, might be the first step towards bank account portability.

To provide bank account number portability, the RBI is also studying a “unified Know your customer” proposal and an unified payment interface in which a customer can be identified with this unique “virtual address” mapped to his mobile