What a cyber criminal told us about KYC frauds

More than 70% of fraudulent banking transfers in India are KYC-linked scams. A senior official at the Financial Intelligence Unit, a national agency responsible for analysing data on suspect financial transactions informed The Ken that KYC frauds amount to over Rs 900 crore ($108 million) per year.

One such fraudster who spoke to us on the condition of anonymity said, ““KYC is an easy trick to pull off. People have heard about banks freezing accounts due to non-compliance with KYC norms. So they get convinced, particularly those in smaller towns and cities.” In a span four years, this fraudster’s gang has stolen nearly Rs 50 lakh.

But the whole point of banks carrying out the elaborate KYC process is to protect their customers from fraud. How is then that this very process accounts for nearly two-thirds of fraudulent banking transfers in India?

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