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HindustanTimes Tue,02 Sep 2014

Banks may seek KYC documents from you again

Mahua Venkatesh, Hindustan Times  New Delhi, April 22, 2013
First Published: 20:57 IST(22/4/2013) | Last Updated: 01:28 IST(23/4/2013)

If you have an old savings account with your bank, chances are you will have to do submit your Know Your Customer (KYC) documents - identity and residence address proofs - all over again.

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Most banks have embarked on updating identity-related information of both current and old customers. Some have already started sending emails to account holders. Banks are also going the extra mile in doing the due diligence and adhering to KYC norms for borrowers seeking fresh loans.

The move comes in the wake of allegations of serious KYC violations and money laundering at India's three leading banks - ICICI Bank, HDFC Bank and Axis Bank - by online portal Cobrapost that ran a sting operation.

http://www.hindustantimes.com/Images/Popup/2013/4/23_04_biz1.jpg

The Reserve Bank of India (RBI), which initiated a probe into the matter, has directed banks to update KYC information of existing and old customers, said government and banking sources.

"While banks have been refreshing their KYC data for existing customers, this time, we want to ensure that all norms are strictly adhered to," a senior executive at a mid-sized public sector bank said.

Public sector banks including Indian Bank and Bank of Baroda have also sought account details of their global branches to see whether all guidelines on KYC have been adhered to.

"We have asked our international branches to do an internal scrutiny and see whether or not all required guidelines have been adhered to," said the chairman of a public sector bank.

Some banks, in a bid to expand the scope of financial inclusion, have relaxed KYC norms for no-frill accounts in certain cases, said sources.

According to RBI data, banks reported 5,569 cases of frauds in 2011-12, involving an amount of Rs. 4,448 crore, and one of the key reasons cited by the central bank was submission of fake KYC documents by borrowers.


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