Saturday, April 5, 2014

Rules and Regulations: It Could Trap Even those who Made it (thoughtlessly)!

Yesterday, I got a message on my mobile phone which was sent from an automatic short message service (SMS) facility of my bank. It reads as follows:

"Dear customer, RBI's KYC norms require Banks to update customer data periodically. To update records we request you to visit your nearest ICICI bank branch with latest photograph, original and self attested copies of identity and address proof" 

When I got it, the immediate  response which came into my mind was some thing that is unprintable. I cursed the government, the Reserve Bank of India (RBI), my bank and all those fellows who think that they are above the people who could keep on troubling the people every now and then for all kinds of things that they think as right.

But today I felt a bit relieved after reading a news item which appeared in the Economic Times. Given below is the clipping:


The news gives the story of the ex-Reserve Bank of India governor, Mr.D Subharao facing problems in opening a bank account in his home town-Hyderabad- after he moved to that place after his retirement. Mr Subharao faced problems in producing a suitable address proof of his current residence to the bank which is mandatory as per the KYC rules of the RBI. 

The news further adds that it was Mr Subharao who was instrumental in making this mandatory rule for the banks to follow when he was the RBI governor. 

Perhaps he never imagined that such rules could make irritations for him when he is no more in power! 

Perhaps he never imagined the difficulties the common people of India would face with such rules which are made with no future thoughts! 

Any way the present RBI governor, Mr.Raghuram Rajan has opined that it is a shame that many in India are failing to get bank accounts due to the bureaucratic bottlenecks! I am not sure how is he going to make the same constricted bottlenecks expanded! 

Why do we need banks? Why do we need an RBI which keep making such idiotic rules every now and then does like this? 

Why do we need a government and the people's representatives who are so insensible to the problems of the people and do not have the sensitivity and the powers to intervene when some of the incompetent government employees make rules and regulations without any forethought? 

These are the common feelings of the people of India when they face such things. Indian authorities keep making such rules and regulations in the pretext of administrative controls without making any efforts to study the consequences and without making any infrastructural facilities for effective implementation of their rules!

It would not have caused much irritation to me had our banks operated the way they used in the past. In the past, I used to bank with a bank branch and the officers and the staff used to know me as a customer by face as I used to be a visitor to the bank for all my banking needs. I got my bank account because some other valued customer who knew me introduced me to the bank and the bank (means the officers of the bank) later got accustomed to me and my financial and other status on account of my dealings with the bank as a customer. They knew how to value a valued customer!

With the advent of computers and computerized banking services, knowing the customer by face became a non essential thing for the bankers. Passwords and alpha numeric identity (ID) words became the keys for banking transactions. Ordinary individual customers became relieved to a great extent as it was not required to go to the bank for most of the transactions. It was indeed a good progress that the banking sector was making so far.

Then came the era of the idiotic ideas in the banking sector! Some were good and essential while many were foolish and uncalled for!

One of those foolish ideas was this KYC! Now the banks were required to go back to the old system in a round about manner by introducing what is known as 'Know-Your-Customer' (KYC) system. 

What a ridiculous thing? The fundamental of banking service is that they admit a customer to transact with them only when they know the customer. How is it that the banks do not know their customers? In reality, in earlier days, the banks , the post offices and the educational institutions were the original authorities who knew a person rightly and who could vouch for sure about a person's good credentials. These very same institutions could certify the identity and address of any citizen! And that was very logical and reasonable!

Obviously, the rules and regulations for KYC were introduced by some one who did not know much about retail banking. 

It is now understood that it was introduced by an ex- RBI governor. It is common knowledge that RBI governors are political appointees and they need not have any previous experiences in banking! So, it is quite likely that such persons with their immense powers could force any idea on the system even if knowledgeable people advice them otherwise. They could proceed to implement rules and regulations the way they think as right!

Now what are the requirements of this new KYC norms that the banks have to ensure? The bank officers and staff have to get another form filled in and signed by the customers and get some documentary evidences as proofs of their identity and address.

People who fail to give this would not be allowed as customers of the bank even when they have been a valuable customer for the bank for years!

Ridiculous ? Isn't it? 

Only foolish people could make such rules and regulations! 

Now what are these proofs that they need? For identity proof they have given a long list and for address proof they have another long list of documents which are accepted. Nothing other than these schedules are accepted! 

Now all these documents need again the Identity proof and the address proof for getting it made from their respective authorities of the government. This implies that in this great country it would not be possible for any one who does not have any of this document initially to have those made if they want to proceed as a law abiding citizen following all the rules. 

So which one is the original document? The rule making babus (administrative officers and including their supporting staff) of India and their supervising political bosses are least bothered! These are silly issues for the people. There are ways and people would know how to do it. If any one is not knowing that is their problem! The authorities of India seemed to think like this. People also began to feel that the authorities made all these rules and regulations for perpetuating corruption and collecting unaccounted corruption moneys! 

Because it is not at all difficult for any one to get any of these documents if they are willing to shell out some money to the agents. 

There are ways and means. 

And for that matter one can make any number of official identities and address proofs! 

If a person wants he can exist in India with many officially certified identities! 

There are no rules and regulations in India on the manner or standard in which an identity document is prepared. That gives enough flexibility for the concerned authorities and their lower level staff to generate documents with irrevocable errors knowingly or unknowingly! 

There exist no inter departmental data exchange in the various governmental departments and organizations and every one goes ahead according to their own ways! No political party who came into power in India so far has felt it necessary to resolve this unique identity crisis of India about which I had written in a few blog articles earlier too. They all proceeded their own way to make things complicated at every instant instead of making things simpler! The Election Commission of India has been doing it for many years now by making the so-called voter i-cards with innumerable errors that any one can possibly imagine! Again, such erroneous voter i-cards are acceptable documents for Id and address proofs for any banks as the KYC document! 

Later yet another authority was created in an arbitrary manner called the Unique Identity Authority of India (UIDAI) which began to make id-cards for Indian residents. However, this authority was not so clear about the purpose of creating these id-cards!

Spending nearly 18000 crores of rupees for the so-called unique bio-metric linked identity card called Aadhar and finally making it an unfinished and failed exercise by UIDAI is the latest governmental actions done without any fore-thoughts in India, in this context. 

Identity card making has become an industry in India. In that process Indians have got the unique opportunity to exist under different identities if they so desire. Of course, no genuine citizen would make advantage of this loop hole. But that would not be the case with all those non genuine people. 

That means, the very objective of KYC is failed!

So what are the solutions? 

In my opinion, solutions are not difficult. It is easy and simple if the government is pro-people and sympathetic to the problems of the people. 

If the government allows its bureaucracy to work the way they like without any accountability to the people's legitimate questions and probes then things would happen this way only. 

When some governmental programs fail, the concerned people connected with the program should be held responsible and the parliament or the state assemblies should have the power to call them to get explanations. 

In India, unfortunately there is no such accountability at present. It is a free ride for all. Only authorities and no responsibilities! 

Will the future people's representatives ever consider this as some thing important to be debated and resolved?

Only time would tell.

Till that time me and you would remain fuming over all those idiotic rules and regulations forced upon us by the so called authorities of the country even when we live in what is supposedly a democracy!

I heard the potential future PM of India-Mr Narendra Modi-speaking out his vision about governance of India. 

"Less governance for better government" he was heard as telling.

Yes I agree with him fully. If he meant less and less rules and regulations by the term 'less governance' , it is indeed the right approach for a better government.

Because the more rules and regulations made by imperfect individuals would indeed make things complicated for any government to function effectively. The more you try to untie the knots, the more entangled you become! 

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