KYC – Nonsense and harassment scheme

This whole business of KYC is a harassment, as its implementation is haphazard and left to discretion of officers. As soon as an officer gets discretionary powers, it is guaranteed to make the scheme cumbersome and defeat it. Dos and Donts should be clearly spelled out without any discretion allowed. Has KYC stopped any frauds from being committed ? Were Mr.Vijay Malaya's or many fraudster’s accounts KYC compliant or not ? KYC is a much misused discretionary power by the bank officer, only to safeguard his job. There is no limit to being safe. Such safety oriented officers can get ultimate safety by sitting home instead of troubling people and wasting government funds in sending unnecessary letters to all and sundry. This KYC nonsense must stop OR it be clearly spelled out, when the officer should and can demand KYC. It would be helpful if the bank sends an authorised person to the customer’s house to get whatever KYC compliance they want. Why should the customer have to take leave for the day and go to the bank for KYC,everytime the bank decides it is time to update ?

I have faced instances (State Bank of India) where everytime the officer changes, the bank starts asking for KYC documents of all account holders. They indiscriminately send letters to customers, who are expected to take leave and come to the bank. They dont loose anything, well, they are only doing their job and to hell with the genuine customer !. Only the government looses courier, postage and stationary charges, not to mention the time and effort. The customer looses his day's earnings. Last when this bank asked for my KYC even after I repeatedly had complied previously, instead of complying to cure the alleged KYC deficiency, I made an RTI application and sought copies of my photograph, original application form, ration card, passport copy, etc. from bank records. They (SBI) duly gave me these. When I asked them why they sent me letter for KYC when every document is available with them, they did not insist any further for KYC till today. They told me it is for updation. When I asked them do they also similarly continuously update their own photos and signatures in their own original service records prepared at the time of joining service, they had no answer. How to ensure that you are the same person who joined service 25 years back ?

I have also noticed, that when we ask for any service from the bank, the first thing they blindly ask is KYC. So, just to call the bluff, I enticed another bank officer in another bank, (Union Bank of India) by offering him a fixed deposit amount. He immediately accepted it and issued a receipt, without bothering about KYC. Next day when I asked the same person for a certain service, he asked for KYC compliance first. So I have made a complaint about him demanding to know whether KYC is only required if we ask for service and is exempt is we give FD to the bank. The complaints officer has no answer to this and is now trying to shield the errant officer. Both are giving vague replies. KYC was introduced to stop money laundering. Money laundering starts with first depositing money in the bank. But that time the bank greedily accepts FD without KYC. So what purpose does KYC serve ?

I have documentary evidence of what I wrote above. more