Banks blame govt pressure for going easy on KYC norms | india | Hindustan Times
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Banks blame govt pressure for going easy on KYC norms

india Updated: May 09, 2013 01:23 IST
Mahua Venkatesh
Mahua Venkatesh
Hindustan Times
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Banks, which have come under scrutiny following allegations of money laundering by investigative portal Cobrapost, have blamed pressure from the government to meet increased deposit and lending growth targets for relaxing know your customer (KYC) norms.

The issue could be brought up in the next meeting between finance minister P Chidambaram and public sector bank chiefs. http://www.hindustantimes.com/Images/Popup/2013/5/09-05-biz5.jpg

Besides, several banks had relaxed know your customer (KYC) norms under the financial inclusion programme to include those outside the banking net, even in the remote areas.

“Banks had been directed by the government to provide at least one bank account per family all across the country to ensure that its direct cash subsidy transfer scheme could be rolled out,” a senior public sector bank official who did not wish to be identified told Hindustan Times.

Bankers said that the recent developments, where as many as 15 employees of the government-owned banks have been suspended and 10 officers have been divested of their work, would slow down the banking functions and customers would have to wait for their transactions.

“While those who have been involved in these kind of activities must be brought to task but to a large extent the government is responsible for this and even when the economy was slowing down, the finance ministry was unreasonably putting pressure on banks to increase credit,” CH Venkatachalam, secretary general, All India Bank Employees’ Association (AIBEA)said.