No physical verification of address for High Risk customer in Karnataka Circle

The Karnataka Circle Office of the Department of Posts has clarified that physical address verification is no longer required for High Risk depositors, specifically those making deposits exceeding ₹10 lakh. This move aims to eliminate unnecessary delays and inconveniences for depositors while ensuring compliance with updated KYC, AML, and CFT norms.

The clarification comes after repeated reports of delays caused by physical address verification for high-value depositors. Such practices often resulted in customer complaints and financial losses, particularly when addresses fell under different post office jurisdictions.

Key Takeaways:

• No Physical Verification: Post offices are no longer required to perform physical address verification for High Risk/Category 3 customers.
• Source of Funds: For deposits exceeding ₹10 lakh, post offices must collect proof of the source of funds from depositors.
• KYC Compliance: Identity verification and KYC documentation must be updated in the CBS Finacle system diligently.

The Karnataka Circle Office aims to reduce delays in account openings, enhance customer satisfaction, and ensure compliance with updated KYC and AML norms. All post offices under the Karnataka Circle have been directed to implement these instructions immediately, with a compliance report due by December 10, 2024.

References:

1. Physical address verification was omitted for High Risk customers- SB Order 18/2010
2. Address verification continued for specific risk categories (investments > Rs. 10 lakh) - SB Order 14/2012
3. Physical verification omitted for High Risk depositors; proof of Source of Funds is required - SB Order 12/2023