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Banking

Tamil Nadu: Customers Scramble to Withdraw Cash After Bank Lists NPR Letter for KYC

The Central Bank of India's Kayalpattinam branch failed to mention that any of the documents specified would be enough to complete the KYC process.

New Delhi: After a local branch of the Central Bank of India issued an advertisement saying that an NPR letter would be accepted as a valid document for KYC verification, hundreds of customers in the Kayalpattinam village in Tamil Nadu reached the bank’s branch to withdraw their money, according to a report in the Indian Express.

Last week, the Reserve Bank of India included the National Population Register letter on the list of acceptable documents for Know Your Customer (KYC) verification for opening bank accounts or applying for credit cards.

The confusion arose when the bank issued a notification listing the PAN card, passport, voter identity card, driving license, National Rural Employment Guarantee Act card, Aadhaar and NPR letter as documents required for the KYC update. The notice also mentioned that failure to submit these documents would lead to the freezing of the customers’ accounts.

The notice, however, failed to specify whether customers would have to submit one or all of the documents listed.

The advertisement triggered panic in the village near Thoothukkudi and customers, many from the Muslim community, rushed to the bank branch to make cash withdrawals.

A government employee, who withdrew almost Rs 50,000 from her account, said that after the experience with demonetisation, where customers were forced to stand in long queues for days, customers who were panicking reached the bank to make cash withdrawals. “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,” she told the Indian Express.

Also read: Under All-India NRC, Passport May Not Be Enough to Prove Citizenship

Speaking to the New Indian Express, a Muslim woman said she withdrew Rs 1.5 lakh from the bank as the money was for her daughter’s marriage. “I withdrew it in advance as I am afraid that something will happen to my savings,” she said. Another Muslim trader said that some customers were withdrawing their money to protest the BJP-led Union government’s decisions of the Citizenship (Amendment) Act (CAA), the NPR and the NRC. “The Centre is unmoved by the protests. Hence, this (mass fund withdrawal) is an ideal way to show our opposition,” he said.

To assuage fears surrounding the notification, bank officials met community leaders belonging to the Kayalpattinam Muslim Iykiya Peravai so that customers could be convinced after a large amount had been withdrawn in just under three days. “We do not even know if we could convince all customers and get them back to our branch,” the official said.

The official also said that the situation started to normalise only after Rs 1 crore was withdrawn by customers and community leaders had started to spread awareness.

“The panic was so much that even community elders had to struggle to convince them. Most of our customers were Muslims and many of them had taken out almost the entire amount,” the official told the Indian Express.

Another official at the Bank of Baroda said that the bank hadn’t yet added the NPR letter to the list of valid KYC documents as “it doesn’t make sense in adding something that doesn’t exist”.

Assistant general manager at the Central Bank of India, R.L. Nayak, said that the customers at Kayalpattinam were mistaken. Nayak stressed that the Aadhaar card was sufficient for KYC and in the absence of that, any two documents like the PAN card, passport, voter identity card, driving licence, National Rural Employment Guarantee Act card, would be considered for KYC verification.

Also read: Nationwide NRC: Here’s a List of Documents You May Have to Furnish if Assam is the Model

“After RBI included NPR letter in the list recently, we had to add it in our advertisement as we cannot deny that in case someone comes with an NPR letter,” he said.

A top executive of a public sector bank told the Hindu BusinessLine that the NPR was a database containing a list of all usual residents of the country and hence, there was ‘nothing wrong’ in linking it with the KYC exercise.