KYC for Bank Accounts : Many banks phone customers often to request KYC for their accounts. Customers have repeatedly expressed their dissatisfaction with this. RBI Governor Sanjay Malhotra directed banks not to frequently call clients for KYC documentation. He called it a ‘unnecessary annoyance’ and stated that if a customer has already provided the documents to a financial institution, there should be no need to request them again.
Customers are upset by the continuous requests for papers.
During the annual meeting of the RBI Ombudsman, RBI Governor Malhotra stated that customers are concerned about the recurrent demand for KYC documents. He stated that with the use of a central database, documents filed once can be accessed by all financial institutions. However, most banks and NBFCs are not taking full advantage of this opportunity. He asked the banks to move quickly in this direction.
People are voicing their displeasure on social media.
Customer complaints have been on the rise for quite some time. People, particularly on social media, are complaining about the hassle of updating KYC on a regular basis. This statement by the RBI Governor comes at a time when customer discontent with bank processes is increasing. He expressed regret, stating that most banks and NBFCs have not supplied their branches or offices with the ability to retrieve information from the central database. As a result, customers will be inconvenienced.
The RBI Ombudsman had to intervene in 57% of the complaints
Malhotra stated, ‘This will be made easier soon. “It will benefit everyone.” He cautioned banks not to miscategorize client complaints in order to reduce their number. In the fiscal year 2023-24, banks received approximately one crore complaints. If other financial institutions are included, the figure may be substantially greater. In 57% of these incidents, the RBI Ombudsman had to intervene, indicating a need for improved customer service.
According to Malhotra, this is a “must” for all banks, and CEOs throughout the world make time for it.
“Left unresolved, every such issue can erode consumer confidence and tarnish the entire ecosystem,” he warned, emphasising that complaints should not be viewed as a “nuisance.”
Repeat complaints must be avoided because they disclose systemic problems, he explained. The career bureaucrat-turned-regulator also strongly supported for the use of artificial intelligence for complaint resolution, but urged them to consider critical elements such as privacy.
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