'Just wastes billions of man hours': Investor slams 'monster KYC', says it needs to be tamed by RBI

A call to reform the KYC regime has come from fund manager Ashish Kacholia, who on Saturday described the process as a "big, bad monster" that must be urgently reined in by the Reserve Bank of India.

"A big, bad monster called KYC needs to be urgently tamed by RBI, it just wastes billions of precious man hours and causes untold agony to customers for Zero gains to nation," Kacholia wrote in a post. "Any process has to be weighed for cost-benefit and it is time that this KYC re-verification nonsense is ended once and for all. We will even save thousands of acres of forests which need to be cut for the billions of paper photo copies of documents which need to be submitted to banks and brokers."

Kacholia's remarks quickly drew support from other industry voices. Samir Arora, founder of Helios Capital, responded by drawing a contrast with global practices. "I opened my account with HSBC here in Singapore in 1998. I don't think I have had to do KYC even once after that," Arora said.

In December 2024, Congress MP Karti Chidambaram had called for an end to the "tyranny of KYC" after a 59-year-old man collapsed and died outside an Indian Bank branch in Sonbhadra after waiting in line for four days for KYC verification. "I flagged this harassment faced by all during my intervention in the Banking Amendment Bill debate. When nothing has changed, why should customers constantly 'update' their KYC?” Chidambaram posted on X. "This KYC updation is a vicious business where certain firms profiteer from the outsourced contracts."

The incident, first reported by an independent journalist, had drawn widespread outrage. "The cost of mindless exercises like KYC verification: A 59-year-old stood in the queue for 3 days outside his Indian Bank branch in UP's Sonbhadra. 4th day, he collapses and dies outside the bank, waiting for his KYC verification,” the journalist wrote. "Bank had said no fund transfer without KYC. Worse, when he collapsed, the bank rushed his family out of the branch rather than helping him."