Hyderabad Police Bust Nationwide Cyber Fraud Racket, 52 Arrested Including 32 Bank Officials
Operation Octopus 2.0 exposes bank insider nexus across nine states; Rs 150 crore fraud trail linked to 850 cases
Hyderabad: In a major crackdown on organised cybercrime, the Hyderabad City Police have dismantled a pan-India fraud network, arresting 52 individuals, including 32 bank officials, during a high-intensity operation spanning nine states.
Police Commissioner V. C. Sajjanar announced on Sunday that the operation—codenamed Operation Octopus 2.0—targeted a deep-rooted network facilitating cyber fraud through mule bank accounts.
Massive Multi-State Operation
The operation was executed over seven days by 16 specialised teams led by senior investigators. Simultaneous raids were conducted across Maharashtra, Delhi, Rajasthan, West Bengal, Karnataka, Gujarat, Andhra Pradesh, Telangana, and Bihar.
Authorities apprehended 52 accused, including 32 bank officials allegedly involved in opening and managing fraudulent accounts used for siphoning off funds.
Bank Officials Under Scanner
Among those arrested were officials from multiple banks:
- Six from IndusInd Bank
- Five 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
- One each from Equitas Small Finance Bank and HDFC Bank
Police said these officials played “pivotal roles” in enabling fraudulent account creation by bypassing KYC norms.
Role of Mule Accounts and Middlemen
The investigation also led to the arrest of:
- 15 mule account holders who knowingly allowed their accounts to be used for illegal transactions
- 5 account suppliers/aggregators who acted as middlemen connecting fraudsters with bank insiders
Authorities seized 26 mobile phones, 14 cheque books, two pen drives, one laptop, and 21 shell company stamps during the raids.
Rs 150 Crore Fraud Trail
According to police, the cybercrime network used around 350 bank accounts to route illicit funds. These accounts were linked to nearly 850 cases across India, involving transactions amounting to approximately Rs 150 crore.
The racket exploited victims through investment scams, trading frauds, and emerging “digital arrest” scams, where victims are manipulated through fear and psychological pressure.
Operation Octopus: From Phase 1 to 2.0
Earlier, Operation Octopus–1, launched in February 2026, resulted in the arrest of 117 accused across 16 states by 32 police teams.
Building on that success, Operation Octopus 2.0 specifically targeted the involvement of bank officials, uncovering systemic loopholes and internal collusion.
Serious Lapses in Banking Systems
Police highlighted alarming gaps in due diligence, particularly in private sector banks. In several cases, accounts were opened without proper KYC verification, enabling cybercriminals to misuse them for laundering funds.
Commissioner Sajjanar noted that the operation demonstrated “exceptional coordination and professionalism” among police teams working across multiple jurisdictions.
Rising Cyber Threat
Authorities warned that cyber fraud cases are rising rapidly across India, with criminals adopting sophisticated techniques and exploiting institutional weaknesses.
The Hyderabad Police have urged banks to strengthen KYC protocols and internal monitoring systems to prevent further misuse.
