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RBI Frees Us From “Address Proof” Idiocy

One of the worst things about India is the need for a valid “Address proof”. For people who live on rent, this is a bane – the rental agreement is not acceptable, and most other providers of such “proof” (mobile phone providers, aadhaar, even passport) need an address proof in the first place!

What’s a migrant to do? Not open bank accounts? Not have access to ATMs? And if you have an address on your driving licence but live elsewhere, you simply are out of luck – you need full documentation of your new address.

RBI’s helping.

RBI has, in a notification, eased the rules for “address proof” for opening bank accounts.

  1. Henceforth, customers may submit only one documentary proof of address (either current or permanent) while opening a bank account or while undergoing periodic updation. In case the address mentioned as per ‘proof of address’ undergoes a change, fresh proof of address may be submitted to the branch within a period of six months.

  2. In case the proof of address furnished by the customer is not the local address or address where the customer is currently residing, the bank may take a declaration of the local address on which all correspondence will be made by the bank with the customer. No proof is required to be submitted for such address for correspondence/local address. This address may be verified by the bank through ‘positive confirmation’ such as acknowledgment of receipt of (i) letter, cheque books, ATM cards; (ii) telephonic conversation; (iii) visits; etc. In the event of change in this address due to relocation or any other reason, customers may intimate the new address for correspondence to the bank within two weeks of such a change.

So basically:

  • If you have just about ANY address proof you can open a bank account. This address can by anywhere in the country.
  • If you now live elsewhere you need to have no other address proof. Just a letter is sufficient.
  • The bank can now verify this address by sending you, for instance, a cheque book or an ATM card or such.

This is awesome for inclusion.

Many of you are thinking – but people can game this system! They can give wrong address proof! How do you find someone?

This is silly because banks know how to find people. People can easily give fake address proof documents anyhow. It’s useless to believe that just because you have a copy of a driving license that it hasn’t been faked. We have to learn to trust people more and let them in, and detect irregularities internally. If a person transacts more than Rs. 50,000 you want a PAN card anyhow. If there are sudden and large transactions, you might want a phone conversation to confirm or verify.

Hopefully this will help a lot of people. Bank account statements are, by themselves, proof of address. So if it’s easy to open an account, it’ll make it easy to get your other services too.

  • Soham Das says:

    There is another aspect here.
    Say, I walk upto you and say- “Deepak, allow me to LEND Rs X to you on YOUR terms”
    Are you going to ask me if I have come from Timbuktu or Pakistan?
    The exceptions to this logic are communication and disbursing loans- which are valid points.

    • Kaka says:

      Exactly! Always wondered why a bank account needs to do “verification”, etc when I am the one giving them my money. There is more rationale for a Know your bank than know your customer in the context of a bank account. Other things like home branch, etc are also similarly stupid and arbitrarily constraining, especially when those branches move around randomly across the length of a city.

  • EV says:

    @Soham: Well there have been no changes for lending, just opening a simple bank account! Obviously if a bank were to lend, they’d want more proofs, which is legitimate.
    A very welcome move, helps people like students and lower classes to get basic banking services.

  • Ritesh says:

    Hi Deepak,
    yesterday icici bank refused to open the bank account wherein i submitted the last month’s bank statement as address proof, citing they need minimum 3 months statement and also refuse to acknowledge the circular. any recourse i have if you can advise.