Customers continue to face re-KYC issues despite RBI direction

The time intervals to periodically update KYC for the upgrading process and those of dormant accounts are two, eight, and 10 years for existing high-, medium-, and low-risk customers, respectively.

Aakash Gautam, a businessman based out of Jabalpur is not able to complete his re-KYC (know your customer) process. He was trying to do his re-KYC on the mobile application of the State Bank of India (SBI) but was not able to do so.

“I cannot do my re-KYC using SBI’s internet banking service. Instead, the application is showing that I need to visit a bank branch to update my contact details,” Gautam said.

Similarly, Munish Kumar, a businessman from Goraya, Punjab who wanted to complete re-KYC of his mother’s account with Punjab National Bank (PNB) was told by the branch employees that he will need to bring his mother to the branch.

“She is 76 and recently had a knee replacement surgery. She is hardly able to walk,” Kumar said about his mother.

Danish (name changed) also said that he was told to visit the bank branch to update his re-KYC details of his account in Bank of Baroda (BoB). These are not isolated cases.

These complaints from customers are important as the Reserve Bank of India (RBI) in January 2023 said that the re-KYC process can be done remotely through a video-based customer identification process or on the mobile application of the bank.

Also read: RBI eases fresh KYC process, says can be done remotely via video

BoB, in a statement to Moneycontrol's queries said that the bank's customers can submit their self-declaration through registered email ID to their respective branch or the Bank’s centralised Re-KYC cell or through a letter.

"In addition, eligible Individual customers can also complete their Re-KYC through the Video KYC mode without visiting the branch," the bank said in an email statement.

Further, the bank said that eligible customers can take advantage of bank’s video re-KYC facility to complete re-KYC without visiting the branch.

"We are in the process of developing and providing functionality to customers to complete their re-KYC through various non-face-to-face modes including bank’s mobile banking application, internet banking application and dedicated portal, without having to visit the branch," BoB said.

SBI, in an email response said that re-KYC facility through self-declaration is available at and through the banks ATMs, internet banking, and YONO if there is no change in KYC information, the KYC documents available with the Bank are according to the current standards and the Central KYC Registry (CKYCR) number of the customer is available with the Bank.

"Further, irrespective of the availability of the CKYR number, the re-KYC facility of self-declaration where there is no change in KYC information and KYC documents are as per current standards, can also be done through registered email/letter. There is no need for the customers to physically visit the branches," the bank said.

Moneycontrol reached out with queries PNB on email but they were unanswered till the time of publishing the article.

What is re-KYC?

KYC refers to registering a customer's identity documents like the aadhar card, permanent account number (PAN) and other documents with contact information, which banks collect at the time of opening the account.

After this, re-KYC is the next stage of updating details of the customers where banks ensure that the documents collected at the time of opening the bank account are up to date.

Based on the guidelines of the central bank, banks ask for re-KYC of customers at specific intervals to keep their records updated. Additionally, in case any personal details have been changed, customers can update their details through re-KYC.

The time intervals to periodically update KYC for the upgrading process and those of dormant accounts are two, eight and 10 years for existing high-, medium- and low-risk customers, respectively.

What is RBI’s mandate on re-KYC?

The central bank has said the process of re-KYC can be done either through a video identification process or digitally. There is no need to visit bank branches.

RBI governor Shaktikanta Das in a press conference after the monetary policy committee (MPC) meeting in December 2022, said that banks should not ask a customer to walk into the branch for verification/updates of their KYC details.

“Customers can re-KYC online except where there is a change of address. Banks can get customers to re-KYCs without asking them to visit the branch,” Das said.

Also read: No need for customers to visit bank branches for re-KYC: RBI Governor

The central bank also said that if banks insist on branch visits for re-KYC, customers can raise a complaint with the appropriate authorities with the bank or with the central bank.

Is this a new problem?

Earlier in January 2023, Moneycontrol reported that customers with some public and private sector banks faced issues with the re-KYC process.

These issues ranged from technical discrepancies in the system of the banks to customers being asked to visit branches to update the information.

Here, a senior banker with a private bank, who did not wish to be named, said that banks mainly call customers because cases of false information have been reported in the past.

“The entire process of re-KYC is digital. And there have been cases where customers have provided false information through digital means. This is where banks take a precautionary step by calling customers to branches and physically verify the information,” the banker said.

C H Venkatachalam, General Secretary, All India Bank Employees Association, said “Banks move with caution as KYC is a very important thing. From the customer's end, there is the hassle of visiting branches which they do not want to do. Here, the regulator should take note of these things and form a committee to address the same.”