Customers face issues as banks push for re-KYC

Additionally, some banks have given deadlines to their customers to complete their Re-KYC

As some banks push their customers to re-do their KYC (re-KYC), some people are facing issues like process delays at the bank's end, temporary freezing of accounts, etc., five customers Moneycontrol spoke to reported.

Re-KYC (know your customer) refers to a measure taken by banks to ensure that customer documents collected at the time of opening the bank account are up to date.

Ravi Jain, an  Axis Bank customer, said that he is not able to receive funds in his current account despite having completed the re-KYC process. “I have a current account with Axis Bank and I completed my re-KYC 15 days ago. I am still not able to receive funds in the account,” Jain said.

Similarly, Ashok Kumar, a customer of Equitas Small Finance Bank, said that his account has been frozen for the last 20 days despite completing the process. “I visited the bank branch and did my re-KYC. It's been 20 days since my account has been blocked,” Kumar said.

Also read: Banks would need to spend Rs 60-66 cr for re-KYC of Paytm Payments Bank merchant customers

State Bank of India customer Ajju Singh also said that he is not able to transfer funds from his account despite completing the re-KYC.

Re-KYC push

Customers said that they were told by banks to complete the process within a certain time. A customer with Saraswat Co-operative Bank, who did not want to be named, said that he got a call from the bank to complete the process within four weeks. “I was told to complete the re-KYC in four weeks by visiting the branch,” the customer said.

Punjab National Bank (PNB), on March 14, asked its customers to update their KYC data by March 19 to ensure smooth functioning of their accounts. “This is applicable only for those customers whose accounts were due for KYC updating as of December 31, 2023. Failure to update KYC details within the stipulated time may result in restrictions on account operations,” the bank said in a release.

What is RBI’s mandate on re-KYC?

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 changed, customers can update their details through re-KYC. The time intervals for periodically re-doing the KYC for dormant accounts are two, eight, and 10 years for high, medium, and low-risk customers, respectively.

The central bank also said that re-KYC can be done either through a video identification process, or online. There is no need to visit bank branches. RBI Governor Shaktikanta Das, in a press conference after the monetary policy committee (MPC) meeting on December 2022, said that banks should not ask customers to walk into the branch for verification / to update their KYC details.

Also read: Customers continue to face re-KYC issues despite RBI direction

“Customers can do their re-KYC online, except where there is a change of address. Banks can get customers to do the re-KYCs without asking them to visit the branch,” Das had said. The central bank also said that if banks insist on branch visits for re-KYC, customers can raise a complaint with the appropriate authorities at the bank or with the central bank.

Email queries sent to the banks did not elicit a response till the time of publishing the story. Moneycontrol will update the story when the responses come.