Central KYC Registry – for a better customer onboarding experience with Banks
A friend of mine working in a software company recently got transferred from Bangalore to Cochin. As Cochin was a new city for him and I was settled in Cochin for some time he wanted my help in finding a house near to his workplace, near to kids school and daycare, with a lot of open play area, good road connectivity etc. Regarding the interior of the house, there were more specifications from his wife starting from a small but modern kitchen and ending with at least two balconies. This was not too big a challenge and we could easily identify an apartment with all his specifications in just one day. One or two days after he moved in, I was helping him with settling down and we had gone to the local market for purchasing some small household items. While returning home, he asked me to stop near a studio, walked in and asked for a passport size photograph. When the girl sitting at the counter asked him “Sir How many copies”? He said; “Make it 20”. I was quite surprised!! But I didn’t want to interfere in his private matters and so did not ask him why he wanted 20 copies. From there he straight away walked to a photocopy shop and, there again, to my surprise, he took more than 10 photocopies of his Aadhaar card, lease agreement, PAN card, Driving license, Voters ID and various other documents. This time, I became too curious and could not stop from asking him why he required so many copies of passport size photograph and all these documents. With a slight discontentment in his voice, he said; “You bankers with all the KYC formalities have made our life very troublesome. If you want to open a bank account now, you have to give multiple documents multiple times and that too sometimes even to the same bank. I want to open a few bank accounts in the coming days. All these copies are for you people to chew”. As in the past, similar opinions had been expressed by many of my friends regarding completing KYC formalities for opening bank accounts and availing various other financial services, I could fully empathize with him. I told him even my wife had a bitter experience while she tried to open the account for her business enterprise. At this point, my friend lost all control and yelled at me “You bankers didn’t permit even an ex-RBI governor to open an account at Hyderabad and that too immediately after his retirement as RBI Governor. How can your wife be greater than ex-RBI Governor? You bankers do all the KYC for ordinary salary class people like us, but then permit fraudsters to do all types of transactions using the banking channel. Bankers are penny wise and pound foolish”. His outburst continued for another 5 minutes and for the first time I felt sorry for helping him to settle down.
That night back home I tried to divert my thoughts but his words still kept resonating in my ears. Are we denying an individual of his genuine banking needs by over emphasizing on KYC? Are individuals at the mercy of banks to get their accounts opened? Is there a way by which KYC procedures can be simplified, and as the documents are mostly common why one single documentation not be used by multiple entities? Don’t know when, but I fell asleep and was woken up by the mobile alarm. It was a Monday morning and I was back to the office. The first thing that came to my table was a request for sanctioning expenses for sending registered notices to our KYC non-compliant customers requesting them to update their records and if they fail to do so the bank will be, as per RBI guidelines constrained to freeze operation in their accounts. Without even a blink of the eye, I sanctioned it. After all, we have to wear multiple hats!!!