Cyber Fraud: Bank Insiders the Real Culprits!

The Hyderabad City Police have dismantled a pan-India cyber fraud network with the arrest of 52 accused, including 32 bank officials in nine states.

Hyderabad Police Commissioner V. C. Sajjanar said on Sunday that a major operation titled Operation Octopus 2.0 was launched to dismantle an organised cyber fraud network.

Sixteen special teams comprising seasoned investigators conducted the operation simultaneously across nine states over a span of seven days.

The Commissioner said 52 individuals, including 32 bank officials who played pivotal roles in the execution of the fraud, were apprehended.

Six officials from Indusind Bank, five officials each from Bandhan Bank and Bank of Baroda, four each from Federal Bank and IDFC First Bank, two each from Karnataka Bank, Karur Vysya Bank and AU Small Finance Bank and one each from Equitas Small Finance Bank and HDFC Bank have been apprehended.

Fifteen mule account holders who knowingly permitted their bank accounts to be used for layering and laundering illicit funds have also been arrested.

The police also arrested five account suppliers/aggregators, key middlemen responsible for procuring these accounts and facilitating the movement of funds to the masterminds.

The police teams seized 26 mobile phones, 14 cheque books, two pen drives, one laptop and 21 shell company stamps.

According to the Commissioner, there has been a significant rise in investment scams, trading frauds, and “digital arrest” scams, wherein fraudsters exploit victims through manipulation, intimidation, and emotional coercion, leading to substantial financial losses.

Recognising the seriousness of the situation, Operation Octopus–1 was conceptualised to deliver a decisive strike against these illegal networks. Cyber Crime Police Station (CCPS), Hyderabad, uncovered a nexus of 350 bank accounts used to siphon off victims’ funds. These accounts were linked to approximately 850 cases across India, involving transactions amounting to nearly Rs 150 crore.

Accordingly, in February 2026, Operation Octopus–1 was executed across 16 states by 32 police teams, resulting in the arrest of 117 accused persons.

Building on the outcomes of Operation Octopus–1, Operation Octopus 2.0 was launched this week with a focused objective of targeting bank officials.

The operation led to the successful arrest of bank officials who were found to be in connivance in the opening of mule bank accounts. These accounts were used to facilitate cyber fraud registered at CCPS.

The scale of Operation Octopus 2.0 has been unprecedented, covering a wide geographical expanse across India. To execute this large-scale operation, 16 special teams were constituted, each led by an officer of Inspector rank. These teams were simultaneously deployed to identify bank official targets in Maharashtra, Delhi, Rajasthan, West Bengal, Karnataka, Gujarat, Andhra Pradesh, Telangana and Bihar, said the Commissioner.

Despite diverse operational challenges across multiple states, the teams successfully coordinated with local law enforcement agencies and carried out targeted and precision-based actions. Their efforts reflect a high level of professionalism, coordination, and unwavering commitment to duty, Police Commissioner Sajjanar said.

It has also been observed that private sector banks are predominantly facilitating the opening of mule bank accounts. This trend indicates significant lapses in due diligence and KYC verification processes, which are being exploited by cybercriminals. In several instances, accounts have been opened without proper verification of customer credentials, enabling their misuse for fraudulent activities, he added.