A customer in Delhi, India, was recently awarded ₹15,000 by the District Consumer Dispute Redressal Commission (DCDRC) for the post office’s negligence in failing to maintain his Know Your Customer (KYC) details. The customer, who had two accounts with the post office, issued a cheque for ₹1 lakh to transfer funds from one account to the other. However, the cheque was dishonored by the bank due to the absence of the customer’s signature details on the bank’s database.
The customer had provided his signature details during the KYC process years ago. The DCDRC found that the bank was guilty of negligence in failing to maintain the customer’s KYC details properly. The DCDRC noted that the bank is expected to ensure that its KYC database is maintained properly once the details are handed over by the customer.
The DCDRC ordered the post office to pay ₹10,000 as compensation and ₹5,000 as litigation costs to the customer, with 6 percent (per annum) interest from November 5, 2019, when the cheque was dishonored. The post office was also ordered to pay the customer the money deducted from his account (₹296) when the cheque was dishonored.
The DCDRC’s decision sends a strong message to banks that they must take their KYC obligations seriously. KYC is an important part of the fight against financial crime, and banks have a responsibility to ensure that their KYC databases are accurate and up-to-date.
