Monday, January 5, 2009

Banks intensified opening new accounts process after terror attack

After the nasty November terrorist attack in Mumbai the banks have become more strict and vigilant about the process for opening new accounts. Earlier it was not difficult to open a new bank account, just walk into a bank and could open a new account easily. While banks have been following the know your customer (KYC) guidelines issued by the Reserve Bank of India for opening new customer accounts, but now they are closely scrutinizing and verifying customer details for new accounts in wake. Banks are also closely monitoring transactions being carried out. Now the customers credentials are being checked thoroughly and the documents are being verified provided by him.

"Bankers have been instructed by the authorities concerned to be diligent and vigilant about the new customers they get into their fold, especially in cities like Delhi and Mumbai,'' said V S Reddy, managing director, Lakshmi Vilas Bank.

State Bank of India India's largest bank too has tightened its account opening process. A senior official in SBI informed that as the bank has computerized most of its branches and an account can be operated from anywhere in the country, therefore bank is taking extra caution in implementing the KYC norms. Besides, the bank is also rechecking existing customers' account opening documents. In case the find any shortcomings in establishing the identity of the account holders, the account is immediately frozen until the customer provides all details required by the bank.

Some officials said that in certain states like Kerala, the police is carefully working with branch offices and passing on information. "While we have no written communication from the authorities concerned, but police officers are telling us to be more vigilant when it comes to opening new accounts in Kerala,'' P Y Nagar, general manager, Union Bank of India, told TOI.

The verification process has been made stricter and, in some cases, banks are double checking information provided by customers. "While there is no change in the documentation per-se, there is closer scrutiny than before and we can't afford to take everything at face value,'' explains Reddy.

According to the KYC norms of the Reserve Bank with respect to customer acceptance policy (no account is opened in anonymous or fictitious/benami names), customer identification procedure (like proof of residence and identity) and monitoring of transactions (where banks are expected to pay special attention to all complex, unusually large transactions and all unusual patterns which have no apparent economic or visible lawful purpose).

An anonymous senior official from Indian Overseas Bank (IOB) said, "We are now closely monitoring those transactions where there is a huge inflow/outflow of money within a single day or a short time period. We also ask for salary details of customers''.

While some bank officials uphold that they haven't received any circular from RBI after the terror attack, but have intensified checks under KYC norms independently. Sources in Punjab National Bank (PNB) maintained they have never been lenient in following the KYC norms, due to the increasing frequency of terrorist attacks.

In some cases, the strictness done by the bank is not felt by the customer. Over the past few days, one person opened a new account with a large private sector bank in Mumbai. After the submission of all the documents, it took just a day to open the account. Another person, after completing all the requirements for opening an account, also opened an account with a large PSU bank. Private Banks are also strictly implementing the norms. An ICICI Bank official informed that the bank has issued letters to its branch managers not to compromise the KYC norms at any cost. Other private sector banks like HDFC Bank and Yes bank stated that they have also instructed their branch managers not to compromise on the safety issue.


Guddo's corner said...

Great job !!
How about Anti money laundering and Terrorist fianacing guideline implementing ?? I know India is still as an observer , in FATF and to become a member there are some guidelines and issues like HAWALA which needs to be tightened and better KYC Policies .
Consistence in following the policies and procedure for opening new account for each individual , each category is required in India .
Deposit thershold should be maintained , suspicious acivities needs to be treated as equal for each individual and again consistence needs to be improved without any influence .
Vidya Mishra
Baltimore ,USA

salim said...

Memon Co-operative Banks

My name is Salim Moosa batawala I have total RS. 5000000 Fifty lacs.
total family hardened.

RBI has issued order on poor fixed depositors and saving account holders who had several years of deposits.

Now bank is Bankrupts and had liquidation of loss of 345 crores.

Since of last month people are struggling to get their money back.

But it doesnot affect to Management and directors and main first point of contact Mr. PS Telang who is working as a General Manager. who always look after his monthly wages come to his account.

He keep on promising to every customers that you will get money back but i do not think this will be back. Still in every branch on manager and one clerk is sitting for the recovery and show their faces to the public and some times they call police to for their [protection.

My understanding is that there is big group involve ages ago and they also had laundered money to USA with the help of Assistant General Manager Mr. Ejaz Sayani who had green card and his brother is also resident in USA.

This un kind people had ripped off poor and homeless people who deposits their money with a hope that they will get in returns of interest.

Can any one involve in this matter and help to poor people whose money is already looted by these people.

They even do not take their responsibilty leaving in the hands of Mr. Ayyar RBI Administrator, He can't do any thing whatever records they placed in front of him he (Mr. Ayyar) will act on base of papers.

But there is Hidden Scam who can investigate in this matter.

One day this thing will developed as a crime and people will start to kill another ban'ks staff at last every depositors will give their life because of this issue.