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Questions Over , Orders KYC at Residence
The on Thursday, , sharply questioned over its decision to block the personal account and card facilities of MP Abhishek Banerjee, directing the bank to complete additional verification at his residence instead of insisting on a personal visit. Justice Krishna Rao expressed displeasure with the bank’s handling of the matter, asking, “This is the way the bank is doing business with the customers?”
The proceedings arose from a petition filed by Banerjee challenging the abrupt restriction on his account. , representing Banerjee, informed the court that the account, along with debit and credit cards, was blocked on the very day the permitted Banerjee to travel abroad for eye treatment. The bank’s communication cited an “” under its and required Banerjee to visit its branch with original KYC documents.
Court’s Strong Observations on and Customer Treatment
Justice Rao questioned why insisted on Banerjee’s physical presence when electronic KYC facilities were widely available. “Your bank is not on ? Your bank is very keen to see the person come personally. If the bank is interested to see the face of the client, then I will tell – if photograph will suffice,” the judge remarked. He further noted that even government offices now conduct such formalities online, adding, “As per your letter, it seems you are very much interested to see the face of the person… This is the way the bank is doing the business with the customers?”
When ’s counsel suggested that Banerjee’s photograph might be required as part of the process, the court expressed irritation at the shifting explanations. “That is not the case you made out by your two communications earlier… Can you change your stance?” Justice Rao asked, directing the bank to inform the advocate of the documents needed immediately.
Background of the
The bank’s counsel argued that additional KYC documentation was necessary because Banerjee’s details were linked to proceedings initiated by the . However, the court pointed out that the bank’s earlier communications did not mention any ED linkage. The judge sought clarity on whether any criminal proceedings were pending against the MP; Banerjee’s counsel responded that he had protection in the cases and that the freeze was imposed solely by the bank, not on police or court orders.
Banerjee has operated the account since 2017, and his KYC re-verification was only due in , making the sudden freeze appear arbitrary. The court was also informed that Banerjee is scheduled to leave India next week for medical treatment, adding urgency to the resolution.
Bank’s Concession and Court’s Directions
During the hearing, conceded that Banerjee need not visit its branch. Instead, a bank official would visit his residence to complete the additional KYC process. The court directed Banerjee to promptly submit the required documents – including the KYC form, photograph, address proof (Aadhaar/voter ID/passport), and PAN card – and to remain present when the bank representative arrives. The bank was also directed to inform him of the visit time.
Justice Rao listed the matter for further hearing on , at the top of the board, ordering the bank to report the status of the verification and the review of the freeze on his debit and credit cards.
Legal Implications and Impact on Banking Practices
This case highlights a growing judicial scrutiny of banks’ KYC compliance processes, especially when they appear disproportionate or inconvenient to customers. The court’s insistence on and its criticism of requiring physical presence sets a precedent that may influence how banks handle similar verification for high-profile customers or those facing temporary account freezes.
For the legal community, the judgment underscores the importance of in due diligence exercises. Banks cannot unilaterally impose cumbersome requirements without clear justification, particularly when the customer has no prior notice and is facing travel or medical exigencies. The court’s direction to complete KYC at the customer’s residence also reflects a trend toward accommodating digital and remote verification methods, aligning with ’s guidelines promoting .
The case also raises questions about the bank’s reliance on ED-linked flags for freezing accounts. While banks have obligations under , the lack of transparency in communication and the suddenness of the action may invite further judicial review on .
Conclusion
The ’s intervention in the -Abhishek Banerjee matter sends a clear message: customer service and reasonable compliance procedures must prevail over arbitrary administrative actions. By ordering a home visit for KYC and questioning the need for physical presence, the court has reinforced the principle that banks must adapt to modern verification technologies while respecting customer convenience and legal safeguards. The final order on August 24 will determine whether the is lifted fully, but the broader implications for banking regulation and customer rights are already evident.
