Hundreds of customers went on a withdrawal spree after an Indian bank announced its revised KYC requirements. The bank’s action followed the decision by the Reserve Bank of India (RBI) to include the National Population Register letter as a valid KYC document for opening bank accounts. Customers are worried their funds could be frozen.
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Customers on Withdrawal Spree
Customers of the Central Bank of India’s Kayalpattinam branch in the state of Tamil Nadu have been on a “panic withdrawal” spree after the bank issued a notice in a local newspaper regarding its revised know-your-customer (KYC) requirements, local media reported on Jan. 23. The Central Bank of India, a government-owned bank, is one of the oldest and largest commercial banks in India.
The notice, posted on Jan. 11, states that a letter from the National Population Register (NPR) will be made a valid document as part of the bank’s KYC process. Panic ensued as many people oppose the contentious Citizenship Amendment Act (CAA), the National Register of Citizens (NRC), as well as the NPR. Many customers reportedly said they are scared that their money could be blocked.
An officer of the bank told NDTV on Wednesday that “Normally we would have a withdrawal of around 25 lakh [2.5 million] every day,” adding:
Now this has shot up by six times. People are just leaving minimum balance in their accounts.
The Indian Express reported on Thursday that soon after the notice, “Hundreds of customers in Kayalpattinam village, many of them belonging to the Muslim community, reached the bank branch to withdraw their money.” A bank official said similar reports are coming from branches in many places.
