The KYC menace: Aadhaar-linked chaos frustrates daily transactions

The Election Commission’s special intensive revision of electoral rolls presently underway in Bihar has come in for much criticism for its rigid approach, which is being deemed respondent-unfriendly, and with possible political consequences. The Supreme Court’s instruction last week to include Aadhaar is supposed to ease this situation somewhat.

 

However, in Aadhaar, and now its latest insistence on biometrics, we may have created another monster, which, in the name of adding to the ease of countless transactions, we need to undertake online almost daily, and which actually results in hindering many, making most people tear their hair.

 

Another part is the insistence on know your customer (KYC) for all types of individual transactions, including for opening/renewing the bank account, telephone, electricity and gas connections, credit/ debit/ online payment cards, share trading, making fixed deposits, and even tatkal railway bookings.

 

The KYC procedures, in principle, are a good thing, helping prevent possible online frauds and identity thefts. It is the process and the manner in which KYC is sought  to be implemented by most  agencies, which are required to  do so, that causes problems, often  agonising ones.

 

Aadhaar is the principal pivot on which KYC is based. And herein start the problems. When Aadhaar was introduced, the Unique Identification Authority of India (UIDAI) did not seem to have issued standard formats. For example, how the name is written: generally, it is the first-middle-last format, but in states such as Gujarat, it is the last name followed by the first and the father’s first name (in case of a married woman, the husband’s first name) as the default middle name. In case one uses documents with another order of names (for example, PAN), prompt comes the response of mismatch and KYC is not established!  Further, older Aadhaar cards did not have biometric profiles. Therefore, now one has to subject oneself to finger- and iris-printing. All of this becomes extremely time-consuming  and often, it seems, impossible  to navigate. 

 

I have myself been at the receiving end of this tyranny for some time now. In one recent instance, while trying to revive a long dormant account in a public sector bank, I was directed by the branch to visit another agency some distance away for the biometrics as the branch was not equipped to handle it. On several such occasions, I have thrown in  the towel, not because I fail to  understand what is required, but rather because it is not worth the trouble involved. 

 

But it need not be so difficult at all. First, UIDAI needs to deal with the name order problem. Surely geniuses who implemented Aadhaar initially, such as Nandan Nilekani and R S Sharma, can devise a method by which these problems can be dealt with at source. Banks routinely accept for deposit into my account instruments that have the order of my names mixed or my first name spelt in its more than half a dozen variants. Why can this not be possible with Aadhaar? The authority currently allows card-holders to change details such as addresses, phone numbers etc online with specified documentary evidence, but not the order of names. For that, the cardholder must physically visit the local UIDAI office. One fails to understand the reason.

 

There is an even simpler way. There is a KYC repository authority, which stores all KYC data, including photographs, PAN and contact details linked to the Aadhaar number. Why can the agency asking to establish KYC not access the authority’s data bank with the client’s authorisation and complete the task without making the client jump through the hoops all over again? 

 

But the realist that I am, I realise that these seemingly simple solutions will not be accepted anytime soon. The reason is not technology or devices, but our mindset. Despite 35 years of economic liberalisation and endless talk of ease of doing business, our bureaucratic ethos is still that of a traffic police constable. People are assumed to be simpletons, guilty of whatever transgression they are charged with, and liars to boot. The onus of proof of any of these suppositions being untrue is entirely on the respondent and often requires voluminous and arcane documentation, as the benighted voters in Bihar have been discovering.  The classic case is the ubiquitous survival certificate a pensioner has to provide. In one instance, when an intermediate period certificate was misplaced, the poor soul had to prove that she was indeed alive then!

The KYC, alas, fellow Indians, is in our stars. 

 

(The writer is a Baroda-based  economist.)