A Call To My Bank- How KYC is actually used

Calling Mr. Banker

A few days ago I got an SMS from one of the NEW AGE banks, I have a credit card.

" We have upgraded your credit card, you will get the new one in a few days at your billing address"

Now my billing address is my  parents home, while I live in a different city. I was not planning to go to my parents home for some time. So I called the bank's call center, whose number is given is font about half this size, behind the credit card and I needed find my magnifying glass from my school days to read it.

In these days of paid caller tune the Bank was kind enough to make me listen to free music and lyrics, albeit singing Hosannas about how wonderful the bank and its products are. I was lost in the melodious lullaby and had almost fallen asleep when somebody woke me up to ask for my problem. I explained that would it be possible to deliver the card to my local address. 

"NO", I was told bluntly, as we need to follow RBI guidelines for KYC and if you  need a change in address you need to visit our nearest branch, fill a form and give an application.

Well OK, I thought who wants to take Panga with RBI, not me a struggling blogger, I thought, and would just call my parents to courier the card to me once received.

As I was about to keep the phone, the young man asked me if I am looking for any investments?  I said yes I do have plans for investing for my future but not sure where considering my limited knowledge on all financial matters.

Suddenly the tone of the young man on the phone changed.

" Nothing to worry sir, I will send our Investment manager to your address and  he will help you"

" But my address is of another town, would you send him  here or to my parents home?" I wanted to know.

Any where in country sir, wherever  you say, we can send him to your  office, or home as per your convenience.

" But will RBI not have a problem sending your consultant to my local address while my address in your records is for another city?"

"Nothing to worry Sir, our Manager will help you with all the formalities"

" But what about KYC?"

" Sir my Investment Manager will take care of that"

" OK, let me think about it, I said and hung up".

Since then I have received many calls from the Investment Manager seeking an appointment. It is clear that the poor call center chap and the Investment manager have a target to sell and their bosses ignore RBI norms as long as the money keeps on coming. Remember The Bankster by Ravi Subramanian ?

So here are a few questions I want to ask the new age modern banks, some of them who were recently slapped by RBI for not following the KYC Norms. 

What is clear is the moment somebody wants to invest money though a bank all the KYC norms are thrown out of window and the bankers are willing to bend to adjust customers with funds. For all other cases RBI is used as the Gabbar Singh.

I am all for following RBI norms, but both in letter and spirit, I wonder when our banks will follow the same.

What has been your experience with your bank? Let us hear it in comments.

Are you KYCed

Long ago for most of us the only proof of Identity issued by government was ration card. Then came a time when in most of the towns and villages there were more ration cards than the actual number of residents.

Then the Income tax department introduced the PAN or Permanent Account Number that was supposed to keep track of all tax paying individuals. Then the Election commission decided to introduce voters ID card that would prove that you are a bonafide voter of a constituency and also as your proof of address. Then AMFI decided that all mutual fund investors need to have a MIN mutual fund identification number. This was some years ago but the project was aborted as no body came forward to claim paternity for the same. We also have a Directors Identification number that all directors of public and private companies need to have. Now a BAAP of all the numbers UIN is on the cards which is suppose to be something similar to SSN of USA.

The reason l have written the above paragraph is because the AMFI has again come up with guidelines that all investors need to have a KYC done before they can invest in the mutual funds this will be applicable from January 1 2011. Till date only if you were investing more than INR 50K in a mutual fund in one go you had to get yourself KYCed, any thing less than that you were ok. So most of us would invest less than 50 K in one go and not worry about the KYC process. Now with the rules changed each one of us needs to get ourselves KYCed ( I just coined a new word). While I have got myself KYCed some time back here is the funny part:

In order to be KYCed or KYC compliant you need to fill a form and send the photocopy of the following :

1. PAN CARD
2. Any address proof that varies from Driving licence to bank passbook etc.

What tickles me is that PAN card and any address proof needs to be self attested with a photo graph and need to be sent to CDSL through a point of sales. Which can be your Mutual Fund, your bank etc.

Now my question is when the mutual fund or the bank account were opened these documents were already provided to them now the same documents need to be provided again to become KYCed.

I am sure whosoever thought about this scheme has either lost their ability to think straight or has some vested interest in this whole thing. Other wise there is no reason to ask for the same documents again that were provided at the time of opening the bank account or the mutual fund account.

Any ways since we don’t have a choice this is where you can get the KYC Form

Here are the FAQs that you may want to be answered for KYC process.

The coming New Year is when the new guidelines come in force, so you better hurry up.

Thanks for reading do leave a comment.