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'Re-KYC Updation Became an Undue Pressure on Bankers'
Public Sector Banks, already grappling with a steady decline in staff strength year after year due to flawed recruitment policies, face relentless pressures from the Government. The ongoing Re-KYC exercise has only exacerbated the situation, further straining the limited workforce and adding fuel to the fire.
Author: GB Sivanandam
Published: December 3, 2024
Government programs often place a heavy burden on Public Sector Banks (PSBs) due to the absence of additional manpower and compensation. Already overworked staff are forced to manage extra responsibilities, making routine banking operations cumbersome and potentially compromising procedural integrity.
One such program is the Re-KYC (Know Your Customer) process, a repetitive task that involves updating KYC details already provided when accounts were opened. Despite Aadhaar-linking and prior verifications, banks are now required to collect address and ID proof from customers again. This creates unnecessary delays for both customers and employees and disrupts regular banking operations. Additionally, banks are freezing accounts of non-compliant customers, leading to frustration among account holders and hostility toward frontline staff who must enforce these policies.
Challenges Faced by Bank Employees
- Additional Workload: Top management pressures staff to ensure compliance with Re-KYC instructions, imposing an unrealistic burden on branches.
- Declining Workforce: With a dwindling workforce in PSBs due to inadequate recruitment, managing these tasks is increasingly difficult.
- Disruption of Core Banking Services: The focus on KYC updation diverts time and resources from essential banking activities.
- Customer Wrath: Freezing accounts of non-compliant customers often results in staff facing customer ire, despite being powerless to change policies.
Proposed Solutions
- Customer Awareness Campaigns: The government should prioritize educating customers to update their data as and when changes occur, rather than pressuring bank staff to enforce compliance.
- Streamlining Processes: Banks should explore technological solutions for seamless KYC updates instead of relying on repetitive document collection.
- Improved Recruitment Policies: Addressing staffing shortages in PSBs is crucial to managing increasing workloads effectively.
The ongoing Re-KYC process, while important for compliance, should not come at the cost of overburdening already stretched bank employees. A more balanced approach involving customer education and systemic efficiency is essential to ensure smooth operations without undermining staff morale.
[ The original version of this article is published in bankworkersunity ]