Press Release

KYC Epidemic in Jharkhand Deprives Poor People of their Own Money

(and also affects Jharkhand’s new “Maiya Yojana)

Countless people in Jharkhand are unable to withdraw money from their bank accounts because the accounts have been frozen until they complete “KYC” formalities. This is the main insight of recent surveys conducted in Latehar and Lohardaga district by local NREGA Sahayata Kendras.

https://x.com/roadscholarz/status/1848563748614901880

The victims of this mass freezing of bank accounts include elderly pensioners who depend on their meagre pensions, children who receive scholarships, and women entitled to Rs.1,000 per month under Jharkhand’s new Maiya Samman Yojana.

KYC (Know Your Customer) refers to identity verification formalities in the banking system. These formalities are not easy to complete for poor people. They require biometric verification of Aadhaar number at a Pragya Kendra, taking the verification certificate to the bank, filling a form there, and submitting both with the requisite documents. After that, the customer is at the mercy of the bank for timely reactivation of the account. This can take months.

Overcrowding in rural banks is making things worse. In both survey areas, there were long queues at the local banks. The crowds consist largely of people trying to complete KYC, or women who are looking for their Maiya Samman Yojana money.

The survey teams went from door to door in three small villages of Manika Block in Latehar District (Dumbi, Kutmu and Uchvabal) and four villages of Bhandra and Senha Blocks in Lohardaga District (Booti, Dhanamunji, Kandra and Palmi). In these 7 villages, 60% of the 244 households we were able to meet had at least one frozen bank account. In some households, all accounts were frozen.

Some cases of frozen bank accounts were truly shocking. Examples: (1) Urmila Oraon’s family in Kandra has 6 bank accounts, but all are frozen. (2) Also in Kandra, Bhola Oraon and Basant Oraon’s accounts have been frozen for years because their names are misspelt ‘Bhoula Oraon’ and ‘Basnt Oraon’ in their Aadhaar cards. (3) Many people have repeatedly applied for KYC, without success; some of them have given up and are opening new accounts. (4) When Sora Oraon of Dhanamunji went to the bank for KYC, she had to stand in queue the whole day just to get a “token” for an appointment on 27 December 2024!

This crisis reflects the growing insistence of banks on periodic KYC, under pressure from the Reserve Bank of India. One local bank manager explained that he had a backlog of 1,500 KYC applications, against a processing capacity of just 30 KYCs per day.

Poor people generally have an Aadhaar-linked account with a maximum balance of Rs 1 lakh. What is the need for such tight KYC every few years? This entire process needs urgent review.

For photos, videos and testimonies of persons with frozen bank accounts, see this folder and the Annexure to this press release.

For further information, please contact Paran (8296887106), Jean (9471130049), Pachathi (Latehar – 7765063311) or Devanti (Lohardaga - 8252383567).

Annexure: Case studies of Frozen Accounts and KYC Problems

[For photos, see link]

Case 1: Ashok Parhaiya’s (Uchwabal, Latehar) three children are unable to withdraw their scholarships - their bank accounts are frozen because KYC is due. Ashok took help from a CSC operator and paid Rs 150 per child to get the KYC done but nothing changed. He has given copies of the children’s Aadhaar and passbook to the operator, but whenever he enquires, the operator asks him to wait or check with the bank. For the time being, Ashok has given up.

Case 2: Sangeeta Devi from Kutmu in Latehar district is barely making it through each month. She has two kids with her visually impaired husband, whose bank account has been frozen due to KYC issues. Without money to bribe the CSC operator, it is difficult for her children to get Aadhaar cards. She has already paid a heavy bribe of Rs 1000 to fix a mistake in her own Aadhaar card.

Case 3: Somwati Devi from Sadhwadih (Latehar district) describes the ordeals involved in resolving KYC issues. She says that each time she visits the bank, it is so crowded that some people are turned away. It took her 15 days to get her KYC done. However, her husband Nirmal did not succeed and has opened up a new account at Punjab National Bank in Latehar.

Case 4: Bhola Ram who lives in Kandra (Lohardaga district) is in a thick soup. His name is correctly spelled in his bank passbook, but mis-spelt “Bhoula Ram” in his Aadhaar card. He was told by the bank manager that KYC requires 100% match between his passbook name and Aadhaar name. Until now, he has been unable to resolve the issue because none of his identity documents match each other. His account has been frozen for the last three years.

Case 5: Urmila Oraon is a resident of Kandra in Lohardaga district. Her family has 7 members, out of which 6 have bank accounts - all of them are frozen due to KYC issues. She recently stood in queue for two full days at the bank, but nothing came out of it. She was simply told to go back home.

Case 6 Sora Oraon lives in Dhanamunji, Lohardaga. She has a family of five out of which three have bank accounts that are frozen. When Sora applied for KYC, she had to queue for a long time and then stand at the counter while the staff were chatting forever on the phone. In the end, the bank gave her a paper ‘token’ with an appointment for 27 December 2024.

Case 7 Sarita Oraon lives in Kandra, Lohardaga district. She has an Aadhaar card where her name has been written as Archana. Because of this she is unable to get her KYC done. Her bank account has been frozen for 3 years. She has no idea what to do.

Case 8 Basant Oraon lives in Kandra, Lohardaga district. His name has been spelled correctly on his passbook but incorrectly in his Aadhaar as “Basnt”. Because of this, he has not been able to get his KYC done and his bank account is frozen. Unfortunately, he has no help from the administration.

For video testimonies and further material, see Twitter threads below:

Latehar:

(Eng - https://x.com/roadscholarz/status/1845660835798307119,

Hindi - https://x.com/roadscholarz/status/1845660994917617846)

Lohardaga:

(Eng - https://x.com/roadscholarz/status/1848563748614901880

Hindi - https://x.com/roadscholarz/status/1848564887188013423)

Chhattisgarh: 

(Eng - https://x.com/roadscholarz/status/1846024844695224334

Hindi - https://x.com/roadscholarz/status/1846032175457816791)

Case study: Bhola Oraon (Village Kandra, Lohardaga)

(Eng - https://x.com/roadscholarz/status/1848922947781595303

Hindi - https://x.com/roadscholarz/status/1849042674596151796)