The Reserve Bank of India’s latest draft circular on KYC updates promises relief but delivers little. Despite repeated warnings and a powerful committee report, the RBI has failed to impose enforceable rules that stop banks from arbitrarily freezing customer accounts—especially those of vulnerable Jan Dhan and DBT beneficiaries.
Sucheta Dalal explains how the proposals, while sounding consumer-friendly on paper, still lack standard operating procedures, accountability, or penalties for banks that harass customers. With no clear redress or compensation, India's poorest continue to suffer account freezes and denied welfare payments—while the RBI remains in observation mode.
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