Ridiculous KYC Demands: Indian Banks Gone Wild

Indian banks have a notorious reputation for requesting ludicrous and absurd documents for Know Your Customer (KYC) compliance. This bureaucratic nightmare has become a major source of frustration for citizens, who are forced to jump through hoops to access basic banking services.

The Absurdity of KYC Demands

The following are just a few examples of the ridiculous documents that banks have demanded from customers for KYC purposes:

• Birth certificate of mother and father
• Marriage certificate (even for single individuals)
• Property tax receipts for all properties owned
• Passport (even for domestic transactions)
• Utility bills for non-residential addresses
• Aadhaar card linked to a mobile number that is not registered in the customer's name

The Impact on Customers

The excessive and unreasonable KYC demands have a significant impact on customers:

• Frustration and inconvenience: Customers are forced to spend countless hours gathering unnecessary documents, disrupting their daily lives.
• Financial exclusion: The stringent KYC norms make it difficult for unbanked and underbanked populations to access financial services.
• Identity theft: The collection of excessive personal information by banks raises security concerns and increases the risk of identity theft.

Stories of KYC Madness

Story 1: The Passport for Milk

A customer was asked to provide her passport as KYC proof for opening a savings account. The customer, who was a home-maker with no travel plans, was baffled by the request. Upon inquiring, she was told that the passport was necessary to verify her identity and address.

Story 2: The Mother's Birth Certificate

An elderly man was asked to provide his mother's birth certificate for KYC. The man, who was in his late 70s, had no idea where his mother's birth certificate was. He explained to the bank that his mother had passed away decades ago, but the bank refused to open the account without the document.

Story 3: The Not-So-Smart Aadhaar

A customer was asked to link his Aadhaar card to a mobile number that was not registered in his name. The customer explained that the mobile number was his work number and that he did not have access to the associated SIM card. The bank insisted that he provide a different mobile number, even though Aadhaar guidelines allow for alternate means of authentication.

Lessons Learned

These stories highlight the absurdity of the KYC demands made by Indian banks. They also serve as a reminder that:

• KYC norms should be proportionate to the risk involved.
• Banks should focus on verifying the identity and address of customers, not on collecting excessive personal information.
• Customers should be aware of their rights and responsibilities under KYC regulations.

Tables for Clarification

Table 1: Common KYC Documents

Table 2: Exceptions to KYC Requirements

Table 3: Consequences of Non-Compliance

Tips and Tricks

• Gather all original documents for KYC before visiting the bank.
• Check the bank's website for a list of acceptable KYC documents.
• In case of discrepancies, provide a valid explanation to the bank.
• Keep a copy of all KYC documents submitted to the bank.
• File a complaint with the banking ombudsman if the bank denies services due to excessive KYC demands.

Common Mistakes to Avoid

• Do not provide fake or forged documents.
• Do not ignore KYC requests.
• Do not share sensitive personal information with unauthorized individuals or third parties.

Step-by-Step Approach

1. Gather all necessary KYC documents.
2. Visit the bank and submit the documents to the KYC officer.
3. Verify the details of the documents with the KYC officer.
4. Sign the KYC form and provide your consent for data processing.
5. Collect the reference number for future reference.

Call to Action

Indian banks must review and revise their KYC policies to make them more proportionate to the risk involved. The government should also provide clear guidelines and enforce strict compliance with KYC regulations. By working together, we can create a banking system that balances the need for security with the ease of access for all citizens.