Money & Banking

KYC updation: SBI freezes accounts, customers are in for a shock

G Naga Sridhar | Updated on: Jul 04, 2022

Senior official claims customers were alerted ‘well in advance’; Bank’s login portal, however, has no general notification

As part of its Know Your Customer (KYC) update drive, SBI has frozen ‘scores’ of accounts of customers who have not updated their KYC from July 1.

“The time chosen to implement is disadvantageous to customers as it is the salary time. I have not been informed by anyone about the bank’s decision and now I’m unable to draw money,’‘ said a customer of SBI at a branch here.

Most customers seem to face similar discomfort of not being informed in advance. However, a senior SBI official claimed that a notification was issued and letters were sent to individual customers directing them to update their KYC norms ‘well in advance’. 

SBI’s login portal, however, is not displaying any general notification or alert to customers on the KYC update. It is only known to a customer if they attempt to transact at an ATM or online. 

RBI’s advise

Reserve Bank of India (RBI) advises banks to regularly update KYC given the increasing threat of online frauds. Banks used to seek KYC updation once in 10 years earlier, but now many of them are going for it once every three years. 

“There are scores of accounts which need updating as many stopped visiting banks at the branches during the pandemic and KYC update is needed to ensure safety of the customer,” the SBI official said. Our enquiries with few other banks did not reveal freezing of accounts on account of KYC updation, in all probability, it is now confined to SBI only. 

Published on July 04, 2022
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