RBI Governor Sanjay Malhotra has called for an end to the repeated requests by banks for Know Your Customer (KYC) documents, citing the inconvenience this causes to customers. He emphasized that submitting KYC documents to one entity should be sufficient, allowing access to a central database that can be used by other financial institutions, eliminating the need for repeat requests. Malhotra also stressed the importance of effective complaint redressal and the use of artificial intelligence (AI) in customer service.
He noted that banks and non-banking financial companies (NBFCs) have not enabled their branches or offices to access the central database, resulting in repeated requests for KYC documents, which is an “avoidable inconvenience.” Malhotra urged banks to prioritize customer service, stating that it is in their “selfish interest” to do so, considering the competitive nature of the industry.
The RBI governor also warned banks against misclassifying customer complaints, stating that doing so is a “gross regulatory violation.” He highlighted the importance of addressing customer complaints promptly, noting that unresolved issues can erode consumer confidence and damage the entire financial system. Malhotra suggested that bank leaders, from managing directors to branch managers, should allocate time for complaint redressal, as CEOs worldwide prioritize this task. He also emphasized the need for AI-powered complaint redressal, while stressing the importance of ensuring consumer privacy and security.
Malhotra identified other areas that require attention, including misselling, digital frauds, and aggressive recoveries practices, and encouraged the use of AI and technology to address these issues. Overall, the governor’s comments aim to promote a more customer-centric approach in the banking industry, with a focus on convenience, efficiency, and effective complaint redressal.