KYC Epidemic in Jharkhand Depriving Poor People of Their Own Money in Banks: Survey

Moneylife Digital Team 25 October 2024

Public Interest

Countless people in Jharkhand are unable to withdraw money from their bank accounts because the accounts have been frozen until they complete know-your-customer (KYC) formalities, reveal recent surveys conducted in Latehar and Lohardaga district by the local National Rural Employment Guarantee Act (NREGA) Sahayata Kendras.

According to the survey, the victims of this mass freezing of bank accounts include elderly pensioners who depend on their meagre pensions, children who receive scholarships, and women entitled to Rs1,000 per month under Jharkhand's new Maiya Samman Yojana.

It says, "KYC formalities are not easy to complete for poor people. They require biometric verification of Aadhaar number at a Pragya Kendra, taking the verification certificate to the bank, filling a form there, and submitting both with the requisite documents. After that, the customer is at the mercy of the bank for timely reactivation of the account. This can take months."

"Overcrowding in rural banks is making things worse. In both survey areas, there were long queues at the local banks. The crowds consist largely of people trying to complete KYC, or women who are looking for their Maiya Samman Yojana money," the survey shows.

The survey teams went door to door in three small villages of Manika Block in Latehar district (Dumbi, Kutmu and Uchvabal) and four villages of Bhandra and Senha Blocks in Lohardaga district (Booti, Dhanamunji, Kandra and Palmi). In these seven villages, 60% of the 244 households they were able to meet had at least one frozen bank account. In some households, all accounts were frozen.

As reported by Moneylife, some cases of frozen bank accounts were truly shocking. (Read: Aadhaar E-KYC Menace: 75% Village Households Have At Least 1 Bank Account Frozen!)

Most of these accounts were opened in 2014 under the Pradhan Mantri Jan Dhan Yojana (PMJDY). As per the Reserve Bank of India (RBI) norms, for low-risk customers, updating KYC needs to be done once every ten years from the date of opening the account or the date of the last KYC update.

"This crisis reflects the growing insistence of banks on periodic KYC under pressure from the Reserve Bank of India. One local bank manager explained that he had a backlog of 1,500 KYC applications against a processing capacity of just 30 KYCs daily. Poor people generally have an Aadhaar-linked account with a maximum balance of Rs1 lakh. What is the need for such tight KYC every few years? This entire process needs urgent review," the NREGA Sahayata Kendras says.

You may also want to read…

How Aadhaar E-KYC Is Causing 'Financial Death' of Poor People

Aadhaar E-KYC Menace: 75% Village Households Have At Least 1 Bank Account Frozen!

How KYC Freeze of the Jan-Dhan Account-holders Is Destroying the Lives of the Poor

Aadhaar: Sangeeta Kumari's Misery To Retrieve Her Lost Number

Aadhaar: Start Paying Rs20 for Each e-KYC, 50 paisa for Yes/No Authentication Now!

Aadhaar Database Continues To Have Faulty Biometrics, Unpaired Documents: CAG

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Comments

User

awakenindiamovement.nwm

10 months ago

Dear Madam Please take up other issues regarding Aadhaar - especially the blatant violation in face of Supreme Court Order : https://timesofindia.indiatimes.com/india/children-enrolled-in-aadhaar-can-opt-out-on-turning-adults-says-sc/articleshow/65973475.cms

And CBSE now : https://www.ndtv.com/education/cbse-directs-schools-to-adopt-apaar-id-as-primary-student-identifier-7557166 Apaar is a greater threat for minor children. Parents have no voice against such a blatant tyranny and infringement of our rights