National News

“Constant KYC Updating For No Reason Is A Serious Harassment”, Says Congress MP Karti Chidambaram

January 2, 2025
The Commune

Congress Member of Parliament Karti Chidambaram has called for an end to the “tyranny of KYC” following a tragic incident in Uttar Pradesh, which brought attention to the severe consequences of the Know Your Customer (KYC) verification process. Chidambaram’s comments came after a 59-year-old man, Ramman, collapsed and died outside an Indian Bank branch in Sonbhadra after standing in line for four days in an attempt to complete his KYC verification.

A 59-year-old man, Ramman, tragically collapsed and died outside an Indian Bank branch in Sonbhadra, Uttar Pradesh, after standing in line for four days to complete his KYC verification. Despite several visits and delays due to technical issues, he was unable to finish the process. The bank had insisted that no transactions could occur without KYC completion. When he collapsed, a bank employee reportedly told his family to take him away rather than offering assistance. This incident has sparked outrage, with many criticizing the burdensome nature of the KYC process.

In a post on his official X handle on 31 December 2024, Chidambaram expressed his concerns, saying, “This tyranny of KYC must end

@RBI. I flagged this harassment faced by all during my intervention in the Banking Amendment Bill debate. When nothing has changed why should customers constantly “update” their KYC.? This KYC updation is a vicious business where certain firms profiteer from the outsourced contracts.”

Chidambaram raised the issue of KYC in Parliament earlier in December. He said, “Sir, the tyranny of KYC is happening. I am sure sir you also have a bank account which is linked to some phone number. I am sure they are calling you all the time and asking you to update KYC. I think we should stop this tyranny of KYC when there is nothing changed, your name hasn’t changed, your parents’ names have not changed, your address is not changed, nothing has changed but the bank is calling you millions of times in a year asking you to update your KYC and it is a serious harassment because they are outsourcing the KYC process to some third party agency and that agency has to make these calls to harass you. The government must bring, in order to make life easier for the customer, they must simplify and mandate that if there is no change, there is no reason to update your KYC multiple times in a year.”

Earlier in December 2024, Karti Chidambaram raised concerns in Parliament about the lack of transparency and proper updating in the CIBIL score system. He criticized how CIBIL, a private company, tracks individuals’ credit history without providing a clear way to appeal or address inaccuracies. Karti pointed out that despite timely loan repayments, individuals often face difficulties due to inaccurate CIBIL scores, which are not updated properly in cases such as government subsidies or loan settlements. He called for greater transparency and reforms to make the system more accountable, highlighting that the government missed an opportunity to address these issues while focusing on minor adjustments.

(With inputs from Business Today)

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