Bank KYC Fraud – How to Prevent them

Public sector banks have joined together to form PSB Alliance. All the customers of government banks can avail banking services at their home, including KYC under this service. You can schedule for KYC document pick up. So, if you do not want to visit the branch, the doorstep banking facility can be used.

However, the banks are warning customers to be cautious about KYC (know your customer) fraud. The State Bank of India told its customers to be careful of fraudsters who pretend to be bank officials or representative of the Reserve Bank of India or KYC authority.

Many government banks started asking their customers to update KYC around two months back. The banks began freezing accounts of depositors who failed to do so.

But as the complaints of such practices came to notice, RBI asked financial institutions not to take any punishable action against their customers. And hence RBI gave time until December for depositors to update their KYC.

As many banks were forcing customers to visit the branch to submit documents despite the rising cases of covid-19, RBI has asked banks to make use of digital channels for KYC and not to make it difficult for the customers to visit the banks amid the pandemic.

Taking benefit of the situation, the fraudsters started calling unwary depositors, asking them to do KYC on the phone. They deceived customers by asking them to share OTPs or just taking their sensitive details.

Due to this reason, banks are advising customers not to share any details over the phone or emails or click email attachments. In addition to this, individuals should refrain from downloading apps that claim to help with KYC.

How to be vigilant and avoid the KYC threat?

• If you get a message from the bank for updating your KYC, check if it’s possible to share the documents on the official apps or website of the bank in the first place.
• If you don’t want to visit the branch, use the doorstep banking facility. Public sector banks have got together to form PSB Alliance. So that the customers of government banks can avail banking services at their home, including KYC. You can schedule for KYC document pick up.
• To choose doorstep banking, you can either download an app or call a toll-free number. The app developer must either be Atyati Technologies Pvt Ltd or Integra Microsystems Pvt Ltd. Avoid apps by any other developer. Do not use any other apps or answer to calls asking for OTPs. 

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Krishna Rath is a SEBI Registered Investment Adviser, and since 2015 has been educating netizens on investments and insurance. Krishna is a fee only SEBI RIA and is Odisha's first SEBI RIA. With background in IT, Krishna is changing the advisory space with new innovations in AdvisoryTech.

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