Hundreds of customers went on a withdrawal spree after an Indian bank announced its revised KYC requirements. This might be a yardstick to judge cryptocurrency too.
The bank’s action followed the decision by the Reserve Bank of India (RBI) to include the National Population Register letter as a valid KYC document for opening bank accounts. Customers are worried their funds could be frozen.
Relationship Heist. All Requirements Opposed by the Public
The notice, posted on Jan. 11, states that a letter from the National Population Register (NPR) will be made a valid document as part of the bank’s KYC process. Panic ensued as many people oppose the contentious Citizenship Amendment Act (CAA), the National Register of Citizens (NRC), as well as the NPR. Many customers reportedly said they are scared that their money could be blocked.
According to the Siasat publication, the documents mentioned in the bank’s notice were the PAN card, passport, voter identity card, driving license, National Rural Employment Guarantee Act card, Aadhaar and NPR letter. The notice further states that the accounts of the persons who failed to submit documents would be frozen, but does not mention whether the customers have to submit all the documents or any one of them.
Optional KYC Requirements, But Who Cares?
Following mass withdrawals, the bank sent out another notice on Jan. 19 to clarify that the NPR letter is optional and customers can choose to submit it or other KYC documents. The bank further claims that its earlier announcement was a mistake. However, local media reported that confusion prevailed and customers continued their “cash withdrawal spree.”
A government employee and customer of the bank told the news outlet that nearly all customers of the branch had panicked. She was quoted by the publication as saying: “Since we had the experience of demonetization that forced us to stand in the queue for so many days, every customer who was panicked reached the bank. Bank officials were helpless as they couldn’t convince us why RBI included NPR in the list before it is even updated in most states.”
The Usage of NPR is Somewhat Uncalled for!!
The NPR is a register of “usual residents” of the country, which is defined as a person who has resided in a local area for the past six months or more or a person who intends to reside in that area for the next six months or more, explained India’s Office of the Registrar General & Census Commissioner. The NPR data was first collected in 2010 and it is to be done every 10 years. It is mandatory for every usual resident of India to register in the NPR.
How all of this affects cryptocurrency and blockchain technology? The Reserve Bank of India (RBI) is in talks with the supreme court of India over cryptocurrency ban in the country. While cryptocurrency has been declared safe, there is still much talks about it in the court of law.
The RBI clearly states in its reply to the IAMAI that it has not prohibited virtual currencies in the country, the publication reiterated. In the circular issued in April 2018, the central bank only directed the entities it regulates to stop providing services to persons or entities dealing in or settling cryptocurrencies.