The Reserve Bank has reprimanded the banks which are freezing the accounts for not having KYC. Actually, the banks are freezing the accounts of those people who receive Direct Benefit Transfer (DBT) funds from the government in their accounts for not having KYC.
This includes subsidy, pension, money from a special scheme etc. Apart from this, the Reserve Bank has also found these banks guilty of delaying the KYC update. Due to this also, the accounts of many people have been frozen.
Advice given to follow the instructions
According to the Times of India, while addressing the directors of private sector banks, RBI Deputy Governor Swaminathan J said that banks should ensure that KYC guidelines are followed with both accuracy and empathy.
He said that RBI had earlier also given instructions to the banks. In these, it was said that banks should not freeze the accounts in which money of government schemes is transferred due to lack of KYC.
Many kinds of problems came up
Swaminathan said that the Reserve Bank has come to know about many problems related to customers. The main ones among them are:
- There is considerable delay at the bank’s level in updating the KYC of customers from time to time.
- Lack of proactive approach in assisting customers and obtaining required documents.
- Lack of staff to carry out many important tasks. Due to this, customers are refused any work.
- Sending the customer to the home branch for every work.
- Delay in updating information in the system even after all required documents are submitted by the customers.
Customer is unable to receive money
Swaminathan said that due to the way the guidelines are being implemented, many accounts are getting frozen. Due to this, customers are not able to get their money. He said that the boards should ensure that there is no deficiency in the service of the banks. Especially for senior citizens etc.
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