Central Vigilance Commissioner K V Chowdary on Friday favoured putting in place a network of systems for bank officials to verify the genuineness of data provided to them in KYC forms.
“While there are norms as to what are the things to be taken into account while taking a person as a customer, that you loosely call KYC, in the implementation of it, there are number of shortcomings,” said.
The banks, at present, do not have an online facility to verify the documents given to them as there is a possibility of frauds submitting a fabricated or morphed identity proof, like PAN card or driving licence, he said.
“I take it, in bonafide, believe that the paper given to me is the right paper. If there is connivance, we can punish the bank manager. But, if he is being cheated, he is himself the subject of the fraud. He is not the creator of the fraud.
“So, we need to bring systems in place, where a document is produced, there should be easy and quick way of verification of that document with reference to the original.
If that is not done, then frauds will keep on happening,” Chowdary said.
Having a copy of Aadhaar card helps, but the bank officials should have a methodology by which they can access Aadhaar system and verify the correctness of the data.
“So, that kind of a networking of various databases is required if the system is to be foolproof,” he said.
Chowdary was speaking on the sidelines of the 13th anniversary of Vigilance Study Circle, a professional body established here to spread awareness on vigilance and to improve the knowledge and skills of vigilance professionals.
Earlier in his address, the CVC said technology or automation can only be an enabler to enhance effectiveness and cannot prevent frauds on its own.
“Technology is like a servant to us. We can successfully use it to either reduce the frauds or find out the frauds,” he said, citing some examples.
There should be systems in place which would send “alerts or red flag indicators” to the top management in the event of diversions, he added.
The CVC appealed to the public to stay away from corruption and to go by the rules and laws.