‘My mamaji is on ventilator’: Founder slams bank for freezing accounts due to missed KYC update

A Delhi-based founder has questioned the Reserve Bank of India’s KYC rules after the bank accounts of his bedridden and critically ill uncle were frozen. Saurabh Jain took to social media to express his frustration with the Know Your Customer (KYC) norms, which require customers to periodically update their details.Saurabh Jain, founder of Fun2Do Labs, said that his uncle’s bank accounts were frozen due to KYC rulesJain explained that his uncle, who is currently on a ventilator, was unable to visit the bank in person to complete the re-KYC process. As a result, the public sector bank froze all his accounts. “He had all his life’s savings within PSU bank in FDs,” the entrepreneur revealed.Jain, the founder of edtech platform Fun2Do Labs, said his uncle’s children requested the bank to take a humane view of the situation and unseal the accounts. However, according to him, the bank refused, stating that the accounts could only be reopened once the account holder appeared in person for the KYC process.‘KYC mess is draconian’“My mamaji is on ventilator. He had all his life’s savings within PSU bank in FDs,” Jain said in his X post.“All his accounts have been sealed as due to being bed ridden he could not do re-KYC in person. His kids asked bank to take humane view. Bank said if he cannot come in person, accounts will not open,” he elaborated.Noting that his uncle’s family was unable to access their fixed deposits in time of need, he wrote: “FDs in PSU banks can be useless in time of need due to KYC regulations.”He then tagged the prime miner and RBI, writing: “This KYC mess is draconian. Please help in this time of need.”“To clarify his kid visited bank few months earlier when he was bed ridden and could not go to even toilet. He was not on ventilator when they visited the branch. He has been extremely sick since last 10 months,” Jain said in a follow-up tweet.What is KYC?Know Your Customer (KYC) is a mandatory verification process used banks to confirm a customer’s identity and address. The process is aimed at preventing financial crimes such as money laundering, fraud, terror financing, and identity theft, while also ensuring that institutions comply with government and regulatory requirements.Customers are typically required to submit official documents such as an Aadhaar card, PAN card, passport, voter ID, or driving licence as proof of identity and address.What is Re-KYC?Re-KYC (Renewal of Know Your Customer) is the mandatory periodic process of updating and verifying a customer’s personal details (identity, address, contact info) with banks. It is usually done every 2 to 8 years.Failure to complete KYC or re-KYC within the stipulated timeline can lead to restrictions on bank accounts or financial transactions, as happened with Jain’s uncle.Founder’s post gets supportSaurabh Jain’s post has garnered nearly a million views on X, eliciting a wave of support. Hundreds of people agreed that KYC validations have “gone too far” and become too frequent, inconveniencing honest, tax-paying citizens.“I won’t comment on this specific case but the whole KYC thing has gone too far & has become an inconvenience to law abiding citizens,” wrote Vir Sanghvi.“Why can’t bank staff visit the serious patient in hospital and his house to complete the KYC formalities in person after verification?” asked Shesh Paul Vaid, former Director General of Police of Jammu & Kashmir.Aditya Shah, founder of Hercules Advisors, said that Re-KYC laws are “flawed”. “Have highlighted this multiple times ReKYC rules are flawed. Citizens are harassed asking them to do KYC from time to time,” he wrote on X. “RBI is trying to check fraud. But ReKYC should only be asked if there is a change in the demographic parameter,” Shah suggested.“I’ve written about KYC multiple times. Very very annoying, and in this case, heartbreaking. @RBI you should take cognizance of this. Also please make the process digitally enabled. It’s a punishment, really for the normal man,” said Nikhil Karkare.