10:33 PM
Shame many don't have bank a/c; KYC norms need a retook'
RESERVE Bank Governor Raghuram Rajan on Friday said it was shameful (hat so many people in India did noi have access to banking, and emphasised the need lo make KYC norms less bureaucratic. "It is a shame that so many people in our country don't have access lit hanking." he said.
"Can we do this (KYC) better (without) compromising on security, while allowing case of access? That is something we need to think about. We have lo be innovative." he said while speaking at he 10th convocation of the National Institute of Bank Management here. The Governor cited the case of one of his predecessors, who faced hurdles opening a hank account post-retirement. According to media reports. D Subbarao faced problems opening a hank account in Hyderabad, where he had settled down post-retire-ment. as he could not provide proof of residence. Ironical as it might sound, it was Subbarao who made KYC (know your-customer) norm*, for opening bank accounts and 10th er financial transactions stringent.
"We have to look at what regulations make sense and what regulations don't make sense. If a senior (ex)RBI official cannot open a bank account, there is something wrong in the system. We have to figure out a better way." said Rajan.
The Governor added that it was not his case that the KYC norms were bad. but said we needed to do an assessment of the trade-off between the risk and reward.
"I am not saying that the KYC norms are bad. If it becomes a bureaucratic end in itself and pre vents us from expanding access even while one doing so much to keep the crooks away from the system, we have to re-examine them." Rajan said. While one in 1.00.000 cases would he fraudulent ones who might seep in to get access to an undeserved bank account. Rajan said there might he 1.000 migrants who might stand to get benefitted if we were more liberal.
"Can we do this (KYC) better (without) compromising on security, while allowing case of access? That is something we need to think about. We have lo be innovative." he said while speaking at he 10th convocation of the National Institute of Bank Management here. The Governor cited the case of one of his predecessors, who faced hurdles opening a hank account post-retirement. According to media reports. D Subbarao faced problems opening a hank account in Hyderabad, where he had settled down post-retire-ment. as he could not provide proof of residence. Ironical as it might sound, it was Subbarao who made KYC (know your-customer) norm*, for opening bank accounts and 10th er financial transactions stringent.
"We have to look at what regulations make sense and what regulations don't make sense. If a senior (ex)RBI official cannot open a bank account, there is something wrong in the system. We have to figure out a better way." said Rajan.
The Governor added that it was not his case that the KYC norms were bad. but said we needed to do an assessment of the trade-off between the risk and reward.
"I am not saying that the KYC norms are bad. If it becomes a bureaucratic end in itself and pre vents us from expanding access even while one doing so much to keep the crooks away from the system, we have to re-examine them." Rajan said. While one in 1.00.000 cases would he fraudulent ones who might seep in to get access to an undeserved bank account. Rajan said there might he 1.000 migrants who might stand to get benefitted if we were more liberal.
Posted in: News 2014
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