DBT: RBI pulls up banks for freezing accounts over KYC

Published On : 2024-11-20T08:48:08+0530 [ IST ] | Author : Mayur_Tembhare
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RBI has pulled up banks for freezing accounts that receive direct benefit transfer(DBT) funds from govt due to incomplete KYC. Banks have also been found to be at fault for delayingKYCupdates resulting in accounts getting frozen

RBI deputy governor Swaminathan J said that banks must ensure that KYC guidelines are followed with both precision and empathy. He pointed out that in the past RBI had given instructions to banks asking them not to freeze accounts that receive government transfers for lack of KYC

Our root cause analysis indicates a set of issues including high pendency at the bank level in periodical updation of KYC details of the customers; lack of a proactive approach in assisting and obtaining the required customer documents; inadequate staff deployment in such critical functions resulting in overcrowding or denial of service at branches; directing customers to approach their 'home branch' for availing such services rather than

He said that the way in which the guidelines were being implemented seemed to be resulting in a number of accounts getting frozen denying customers access to their funds.

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Source : Reporters From Sunrise Chronicles

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