Last few days, I was having a war of mails with an SBI branch. My wife had an account with the bank and recently she transferred that from one branch to other. The first thing they told me when I went to the new branch to get a net banking account is “Only your account number is transferred. You need to give your address proof, identity proof and two photographs”. When I walked around, I saw the notice about KYC and guessed what was going on. There was nothing wrong with the account transfer, but the lady was just pushing me to submit the KYC docs.

I called my wife and asked her about the status of KYC document submission. She told me that she had submitted all the documents just one month back in previous branch. However, after I got her net banking account, they did not enable the transaction rights on the same. We called up the branch and the guy told that he will enable the transaction rights. Two days passed, nothing happened! We mailed them and the reply came…

Please submit your ID proof ,  address proof and Mobile number for updating KYC .After submitting these you will get transaction rights

I replied back saying those are already submitted with the previous branch. One thing I noticed is that, KYC does not mandate submission of mobile number. But, the guy was taking a line like, 1 kg potato, 1 kg onion, 1 kg tomato and throw in some coriander leaves too…

This got me pissed off. I replied stating clearly that the KYC documents are already submitted and the mobile number can be found from the application for net banking. Then came the reply…

Your CIF and account is at *** branch. Please send the KYC details… 

Well, I had enough of the guy. I decided to do a bit of research about KYC. It did not take much effort. Google came to the rescue and I got two documents.

1. RBI notification on KYC

2. A document on SBI site explaining KYC

The first document from RBI told me clearly that

a. The bank should safeguard the information supplied by customers

b. The bank should form clear norms about KYC

The second document told me the possible norms of SBI. One can refer to slide 5 of that document to see when a customer is expected to submit KYC documents. A mere transfer of account was not part of that. So, I wrote the following mail to my wife and asked her to forward the same to the branch.

…You can refer slide 5 of that document. It lists down some conditions for which bank may ask you to submit or re-submit the documents. However, none of those situations apply here. It is not a new account, it is not an old account where the documents are not submitted, you have not asked for any locker facility, there is no change to people who operate account and as far as I can see, there are no suspicious transactions on your account. Now, you can submit these documents again if you want. However, it is important to know what happened to the previous set of document that you submitted. Did they throw it in waste basket or (mis)use it to open an account for a terrorist or got a sim card issued with that? …

Well, to make the long story short, we got an explanation from them why they did not update the information previously submitted. Though my wife agreed to resubmit the documents, I think it is important to make these people answerable. Imagine, from the common man, who does not have time to find out the details and argue with these people, how much of documentation these people will be getting done and done again and again and again…!

Today, all such schemes are flawed by such issues. Sometime back when address proof was made mandatory for mobile connections, some of the telephone companies were asking for resubmission of address proofs. However, they were doing it indiscriminately. Now, what happens to the old document that they collected? Did it actually go to the telco or went into the waste bin of reseller? The authorities who form such rules and mandate that everyone should submit crucial documentary proof does not mandate the proper handling of such documents. The way these documents are handled makes the common man lose respect for such initiatives. I would like to strongly suggest that be it TRAI or RBI, but if they ask institutions to collect crucial information from customer, they should also ask the businesses to take care of the following.

1. Acknowledge the documents that is collected

2. Handle them with due care

3. Maintain the privacy of the user

I believe, using digital documents and digital signature can be of great help here. Paper documents can be easily forged and the person sitting at the counter and accepting the documents can handover the same to someone else to make more copies. In case of a digital document, I can add a message that the document is submitted for XYZ purpose and it should be used only for that purpose and sign the whole document including the message. Lets just hope that one day we will grow up to that.