More Indians have been driven round the bend trying to meet the so-called KYC norms than anything else. KYC stands for know-your-customer, and the idea behind asking banks, passport offices, mutual funds, mobile companies and even RTOs to follow KYC norms is to ensure that bogus people don’t get in the system using fake names and credentials.
But, in practice, KYC sends ordinary people scurrying around for this document or that, while the fraudsters simply forge the relevant documents to comply with the KYC.
If you want to know why, consider what the above-mentioned organisations expect from you.
KYC needs two kinds of documentation—identity proof (to tell them you are you and not anyone else), and address proof, so that mails and bills and even parking tickets can be sent to the right home.
In any KYC requirement, the key issue is really proof of address—which is what is sometimes difficult to comply with. If you have address proof, the ID proof is easier to show. You just need to paste your mugshot on a form and you can get your PAN card or passport.
Most KYC requirements accept address proof from documents like passports, voter IDs, ration cards, utility bills, and bank statements. But the catch is this: getting one of these requires prior address proof.
The passport office accepts address proof like telephone bill, electricity bill, bank statements, and parents’/spouse’s passport as acceptable proof of address. But to get any one of them, you need another address proof.
This is because the telephone bill from which you hope to get a passport will depend on you providing address proof like passport, bank statement, electricity bills, IT returns forms and like.
And banks will ask for passport, telephone bills, voter IDs, etc. You go round and round.
But there’s the Unique ID card, you may say. But the UID Aadhaar card also requires you to submit documents like passport, bank statements, voter IDs, driving licence and the like. And to get a driving licence, you need to submit one of the above mentioned documents. The only saving grace with the UID is that it allows you to give a certificate from your employer or school certifying you address.
So, what’s the point we are trying to make?
As far as proving your address is concerned, almost every document is based on the validity of another document which in turn is based on the validity of yet another document. It’s like a vicious circle which keeps repeating over and over again. There isn’t a single standalone primary document that does not require another proof of address whatsoever.
Even if you have your property document or the rental agreement document as an address proof, it would only work as your primary address proof for you—but not your family which stays with you. They will have no address proof. If they want a passport or driving licence, you will spend considerable time venting your spleen at RTO officers and bank counter-persons.
Today’s DNA newspaper reports that in future you could open a bank account with a single document. Mostly probably it will be the Aadhaar card or passport. Aadhaar accepts 33 different types of documents as address proof. As mentioned above, most of the documents barring a few are based on other documents in the list.
Recently, Firstpost did a story titled Relocating? Here’s a list of financial documents to update, where we told you about the procedure to update your records in case of a relocation.
The DNA report quotes HR Khan, Deputy Governor, Reserve Bank of India, as saying: “If somebody changes his address, he can be given time of six months to give another proof. For six months, he can run the same proof.”
But this is just like lobbing the problem to another date. How does one obtain an address proof if there is no original source for it barring a lease agreement or home purchase document?
Unlike your identity which does not change, your address can change for various reasons, especially in urban areas, where jobs hops and address changes are frequent.
Currently, the Aadhaar card offers many options for address proof, but it would still leave some categories without the possibility of an address proof (an aged mother living with you, for example).
Isn’t it time to simplify this by allowing anyone in a household with a valid address proof himself or herself being able to certify that someone lives with him/her and thus confirm the address?