‘KYC’ not updated, accounts frozen; crowds at banks

Chhatrapati Sambhajinagar

Several bank accounts were frozen on Monday due to incomplete KYC (Know Your Customer) updates. This caused a rush at banks, as many customers who had already submitted the required documents and mobile numbers were forced to visit again. Frustrated customers blamed the banks, saying, “The fault lies with the bank, but we are the ones suffering.”

The crowds were so large that many bank employees couldn't take their lunch breaks. Customers waited for hours outside SBI and other government bank branches. Some questioned, "Why should we suffer for the bank's failure to update KYC?" Bank staff struggled to provide answers, and the branch manager at SBI’s Bajrang Chowk explained that incomplete KYC updates caused the freeze, assuring customers that updates were being processed.

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RBI’s KYC Directive:

The Reserve Bank of India (RBI) recently ordered that accounts receiving government DBT payments should not be frozen for missing KYC. RBI Deputy Governor Swaminathan J. stated that delays were often due to bank lapses. Non-compliance with RBI’s instructions has led to accounts being frozen, leaving customers unable to access their money.

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Why Is KYC not updated?

Many banks are understaffed, causing delays in KYC processing.

Banks lack a proactive approach to assist customers with KYC.

Submitted documents are not updated in the bank’s systems.

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Caption:

Account holders crowding banks on Monday to complete their KYC updates.