Finance ministry directs major PSBs to fast-track re-KYC verification

Out of 53.9 crore Pradhan Mantri Jan-Dhan Yojana accounts, 11.2 crore are inoperative and 10.5 crore accounts are pending for re-KYC

The finance ministry has instructed all major public sector banks to submit their action plans by the end of the month for completing the pending re-know your customer (re-KYC/e-KYC), according to a senior government official familiar with the matter.

 

“The government also directed lead banks to coordinate with gram panchayats to mobilise people for completing the re-KYC process. Moreover, the finance ministry has instructed senior management of banks to set up dashboards for regular monitoring of pending re-KYC cases and conduct regular reviews with field staff,” said the official.

 

Out of 539 million Pradhan Mantri Jan-Dhan Yojana (PMJDY) accounts, 112 million are inoperative and 105 million accounts are pending for re-KYC.

 

Of a total of 2.36 billion normal bank accounts in public sector banks (PSBs), 619 million accounts are inoperative and 229 million are pending for re-KYC, according to an internal document reviewed by Business Standard.

 

“The government has also told banks to explore the possibility of temporary deployment of staff considering the volume of pending re-KYC in various branches. Moreover, there must be efforts to create awareness campaigns among people about the process of re-KYC and setting up a dedicated helpdesk for the purpose,” the official added.

 

Uttar Pradesh (UP) has 96 million PMJDY accounts, of which 23.2 million are inoperative and 17 million accounts are due for re-KYC. This is followed by Madhya Pradesh and Rajasthan, where 8.21 million and 7.72 million PMJDY accounts are due for re-KYC.  

 

The finance ministry has further said that the reporting entities (REs) shall adopt a risk-based approach for periodic updation of KYC. This will ensure that the information or data collected under customer due diligence is kept up-to-date and relevant, according to the document reviewed.

 

Periodic updation will be carried out at least once in every two years for high-risk customers. It will be once in every eight years for medium-risk customers and once in every 10 years for low-risk customers from the date of opening of the account / last KYC updation.

 

The official quoted earlier said banks should facilitate re-KYC through any branch and not be restricted to the base branch.

 

“Banks may explore the possibility of matching their records with the details mentioned in Aadhaar in regional languages if the details in English don’t match. Banking correspondents (BCs) should be involved in the exercise of re-KYC because of their last mile presence. Moreover, signed declarations from the customer submitted to BCs may also be accepted in case there is no change in the KYC information,” the official said.