## Wednesday, November 27, 2013

### KYC - Know Your Customer - What a bloody joke

First things first. We, as in the Stonethrower Family Unit, are law abiding. We do not steal, physically hurt, drive when drunk and by and large are honest. Of course, all these are relative standards. Compared to the wonderful Tarun Tejpal we are like pure driven snow. But, I am sure you get my point. We generally follow the law.

Secondly, all that I am writing here is what I have personally faced. It is not hearsay, it is not third party information.

One of the laws that our great country has, mandates, that banks should have a robust KYC policy. KYC means Know Your Customer. So, if you have to open a new bank account or if you have an existing bank account you have to provide your bank with documents and proof that you are you and not Ajmal Kasab. So in this process you need to prove your residence, your age, your sex, that you are not menopausal, that you are over the age of 18, that you have photographs and that you have thumbs which you place on a ink pad and do thumb impressions on documents and so on and so forth. I am sure all of you have done this or have had this done for you by your peon, father, driver or chartered accountant, and in the case of rich fat and lazy bastards – by your grovelling relationship manager.

At the start of this financial year, for a variety of reasons which I shall not go into here, the Stonethrower Family Unit decided to each open a bank account with the venerable HDFC Bank. So, we filled in the forms, stuck our photographs, put our thumb impressions and provided all manner of KYC. Lo and behold, our accounts were opened and we all patted ourselves on our backs on a job well done. We marvelled at the efficiency and politeness of the staff at HDFC Bank who performed so well. Mind you, our expectations are so low and the red tapism so high, that if we manage to have a bank account opened with just 2 visits to the bank we think we have achieved a lot.

A few months down the line I asked Sister Stonethrower if she was getting her statements from HDFC Bank. No was the answer. So off I went to the branch and told them so. They said we will send a duplicate set at once. A few weeks later I asked Sister Stonethrower if she was now getting her statements from HDFC Bank. Once again no was the answer. Mystified, I trooped of to the bank once again and complained. The man peered into the screen and asked is her address 562 ***************’? I replied no it is S-62’. Needless to say he did not and in light of what you can see in the photograph below, could not read out the rest of the address. On hearing this I thought, foolishly, Ahh haa!!! That was the problem a wrong address entered in the system. Sir please fill in the address change form’ I was told. He also, very kindly, printed the bank statement. On looking at it, I was shocked. Please do have a look at the address! Please also have a look at Sister Stonethrowers gender. She has been classified as a “Mr.” I swear to you that I have not made this up. This is a photograph of the address on the bank statement edited for purposes of confidentiality of course. My question is why did you ask for all that KYC nonsense and what have you done with it? This whole thing raises so many questions, but, frankly, I cannot be bothered writing them all down.

If this was not enough, out of the blue, I got a letter from Central Bank of India – stating that a bank account standing in Mother Stonethrower name was not KYC compliant and asked us to provide the KYC material to make it so. This threw us all, we could not recall when and why we would have ever opened an account with Central Bank of India. So, off I went to the branch in question and found out that this account was opened in 1992 and was now marked dormant. It had a few thousand rupees. I thought I should get it KYC compliant and close it.

So, once again I went through the whole rigmarole of getting the KYC documents, thumb impressions and allied things done and went off to the branch to submit all this. The man at the counter punched in the account number into his computer terminal and then looked dumbstruck. There are no signatures on record’ he spluttered, literally spluttered. He was so shattered that he called his colleague, also about 65 years old and they both looked like goldfish, wide eyed, innocent and dumbstruck at the screen and said, no signature on records. Apparently the bank had for whatever reason not scanned our signatures when having the bank computerised. And now the original signature cards were destroyed.

The officer, was in that sense cool about the whole thing once he got over his spluttering. He simply said, submit the KYC, we will activate the account and then regularise it as far as signatures are concerned. This episode is going to be fun. I am more determined than ever to take this matter to its logical conclusion. I want to first activate the account and then shut it, all when the bank has no records of our signatures. This should be fun, lots of fun.

After this hilarious episode, of which we have not heard the last of, I waltzed off to Citibank, all things considered, my bank of choice. I wanted to change the address on my bank account. So, in true Bharat Sarkar Babu style, I took my flat purchase agreement which showed that I was the owner of my flat.

I told my relationship manager, here is my address proof’, please change my address.

She looked at me pityingly and said Sir, you can do this online’.

Online’ I squawked. How could that be’? Do you not require any proof’?

No sir’ she said witheringly, we are now moving things online’ she said with utter contempt for me. She said that there was no need for proof’ as now everything was online.

Then she said that I could use her computer terminal to log in and change my address while she would look over my shoulder and help me along the way. I did so, and yes, it was possible. However I was still sceptical, very sceptical but she looked at me triumphantly. I thanked her, apologised for doubting her knowledge and left the bank.

No sooner had I left the branch and walked some 50 meters that I got a call from her, asking me to submit the flat purchase agreement as proof’. I did a quick about turn and handed over the proof’.

I do realise that in a period of a just a couple of days I had dealings with three types of Banks that are common all over India on basically something that was common across all banks. A Nationalised Bank [Central Bank of India], a Foreign Bank [Citibank] and a home grown domestic bank [HDFC]. Clearly, the Nationalised Bank [Central Bank of India] had absolutely no systems in place but had staff that knew everything and which probably had a process \to do this with lots of paper affidavits and notarising and stamp paper. The Foreign Bank [Citibank] had all systems in place but unfortunately some of its newer recruits are clueless. Unfortunately, the home grown domestic bank [HDFC] has neither the systems nor the people.

Of course when you look at this you will realise how little this KYC nonsense means anyway. Mind you, as I said in the beginning, the Stonethrower Family Unit, are law abiding. We have no bad intentions. It is all very well having rigorous KYC norms in place, but if Banks themselves are totally negligent I am unsure how this can ever be enforced.