Accounts can not be closed for non-compliance of KYC norms without notice

NEW DELHI: A Delhi consumer forum has ruled that a bank closing its customer's account without serving him notice seeking his various particulars as per the banking sector's Know-Your-Customer (KYC) norms, is liable to be held guilty of rendering deficient service.

Delhi's Central District Consumer Disputes Redressal Forum, headed by its president B B Chaudhary gave the ruling while holding Karol Bagh branch of the State Bank of Bikaner and Jaipur guilty of rendering deficient service to one of its customers, whose bank account it had closed without serving a due notice to him, seeking his particulars.

It also asked the bank to pay Rs 15,000 as compensation within 30 days to complainant R N Prabhakar, a lawyer, for causing "harassment, pain and mental agony" to him.

"We hold that the act of the bank amounts deficiency in service. It led to harassment, pain and mental agony to the complainant," the forum said.

The forum said the bank, itself, did not follow the RBI guidelines, published in a news daily, on the KYC by closing the account of the lawyer on its own.

Rather, it cleared two cheques of the complainant before closing his accounts without giving him a notice, it said.

"It was not appropriate on its part to close the account or not to honour the cheque of the complainant by taking shelter under the public notice," it said.

Prabhakar, in his complaint, had alleged that the bank dishonoured a cheque issued by him in favour of Airtel without any valid reason. He also also sought that his complaint be treated as a public interest litigation.

Source: EconomicTimes