RBI Governor Calls for Streamlined KYC Process and Enhanced Customer Service

RBI Governor Sanjay Malhotra urges banks to streamline KYC processes and enhance customer service. He criticized repeat requests for KYC documents and misclassification of customer complaints, highlighting the need for systemic improvements. Malhotra advocates for AI in complaint redressal and warns against practices like misselling and digital fraud.

RBI Governor Sanjay Malhotra has issued a strong message to banks, urging them to streamline their 'know your customer' (KYC) processes and addressing the ongoing inconvenience faced by customers asked to repeatedly submit the same documents. Speaking at the annual RBI Ombudsmen conference, Malhotra emphasized the importance of utilizing a centralized database for KYC documentation access, highlighting that repeated requests constitute an unnecessary burden on customers.

Malhotra also addressed the issue of customer complaints, revealing that banks received over one crore complaints in FY24, with 57 percent requiring RBI mediation. He urged banks to improve their consumer services, not only as a duty but because it benefits them in the competitive banking sector. Bank leadership at all levels should allocate time for addressing complaints to avoid eroding consumer confidence.

Moreover, Malhotra advocated for the use of artificial intelligence in complaint management to increase efficiency while stressing caution regarding privacy concerns. He called for a focus on reducing misclassification of complaints, misselling, digital fraud, and aggressive recovery practices, underscoring the need for systemic improvements to prevent repeat issues.

(With inputs from agencies.)