Pensioner in SBI , No Loan, still High Risk Category - ReKYC - 2 Years

[R_A_J]

Appriciation for your reference ☝️.

On a Saving Account side SBI classify silver, gold, diamond Linked to Privilege, benefits.

Silver, gold, diamond etc are segment which are categorized for providing services, freebies, etc to client basis their relationship value.....whereas risk categorization is different thing. It is generally not visible to the end customer, but is done internally by the bankers basis the risk profile of the customer....

like @CosmicCat mentioned, it is mentioned at the time of customer ID creation basis the profile of customer like occupation, nature of income, type of business, type of entity (for non-individual), mode of relationship establishment, etc etc

 

[desiviru]

This. As you can see in this video, the banker manually categorizes the risk profile of the customer in Finacle (A commonly-used CBS among most Indian banks) while creating the Customer ID (CIF).

So, the risk classification is essentially upon the staff's discretion or perhaps could be based on the internal policy governing risk profiling which the banker has to follow.

These days they have indulged system also just like AI is generating risk profiles accordingly. But still under testing. So it is working both ways. Manual tagging and system tagging.

New account opened and hell lot of txn within few days are tagged by system itself just like a CC/DC txn with unusual txn amount then previous patterns falg you card and leads to temporary block or verification.

 

[hender]

Silver, gold, diamond etc are segment which are categorized for providing services, freebies, etc to client basis their relationship value.....whereas risk categorization is different thing. It is generally not visible to the end customer, but is done internally by the bankers basis the risk profile of the customer....

like @CosmicCat mentioned, it is mentioned at the time of customer ID creation basis the profile of customer like occupation, nature of income, type of business, type of entity (for non-individual), mode of relationship establishment, etc etc

That's the point ☝️, if someone having regular Salary/Pension from Govt with Fair Balance alongside FD and PPF.(No LOAN)
Just bcoz of age it comes 🤔 under High RISK ??

 

[desiviru]

That's the point ☝️, if someone having regular Salary/Pension from Govt with Fair Balance alongside FD and PPF.(No LOAN)
Just coz of age it comes 🤔 under High RISK ??

As I mentioned, age is one of the factor but not the only factor. Banks are of opinion that once retired people don't often earn much or spend too much until unless it is medical expense. So there are many factor account can be put a high risk one. Also the capability to take loan or pay off in old age is very less as life longevity is unexpected at that time with insuarances of people also maturing by that age or say 5-10 yrs left.

So they consider every small point and put account on risk.

 

[hender]

As I mentioned, age is one of the factor but not the only factor. Banks are of opinion that once retired people don't often earn much or spend too much until unless it is medical expense. So there are many factor account can be put a high risk one. Also the capability to take loan or pay off in old age is very less as life longevity is unexpected at that time with insuarances of people also maturing by that age or say 5-10 yrs left.

So they consider every small point and put account on risk.

Fair enough, But HIGH RISK term is - is it possible risk for bank to have that customer(with much of his own earned wealth)?
Or Customer is at High RISK keeping money with the bank ?

 

[desiviru]

Fair enough, But HIGH RISK term is - is it possible risk for bank to have that customer(with much of his own earned wealth)?
Or Customer is at High RISK keeping money with the bank ?

He is high risk only when giving loans and also prone to cyber frauds because of his age where they assume he/she not able to understand technology much.

World assumes Hender bhai, world assumes.

 

[hender]

He is high risk only when giving loans and also prone to cyber frauds because of his age where they assume he/she not able to understand technology much.

World assumes Hender bhai, world assumes.

PPF and Physical FD, can be hacked 🤔

 

[Trust Me]

People having FDs more than 10L, PPF, Balance in accounts are categorized as high risk customers and also age playing factor. They are more prone to losing their money to frauds.

Maybe age .

Are you suggesting that a low-risk customer would transition into being a high-risk one as he/ she gets older?!

Gaining in age and hence being more prone to frauds is a different kind of risk where the customers themselves are at risk, and so, has no part to play in the Risk Profiling done by the banks, where the risks the customers themselves can potentially pose to the banks is what is relevant. Please note the distinction.

AFAIK, the RBI Master Directions and the IBA Guidance to the Banks don't mention age to be a factor in Risk Profiling of customers.

In normal world, a high risk customer is a one who can defraud a bank. But here high risk profile is given when the transaction patterns aren't matching the KYC details. You tell bank you are having 5L income and then doing 15L txns per year and cash deposit in high value. Bank system consider you are bringing this money to them through not so legal means. They put you in high risk profile.

But sometimes senior citizens are put on high risk because they are not having jobs yet bigger txns flag the system.

To get rid of this the KYC details with annual income and total networth should be icreased.

My total networth mentioned in bank account is more than 1.5-2 crore now. This lessens the problems. But can invite taxman if you really don't have proof for what you declare.

AFAIK, the income/ worth information sought along with the KYC is not a mandatory part of the KYC process. People may even choose not to provide such information at all!

For example, I sometimes had mentioned only a ball park figure about my income, and at other times skipped that part altogether! And I don't think I had ever divulged much about my net worth to individual banks through such means. This has never landed me in any kind of trouble so far. And I, apparently, am still considered to be a low-risk customer at several banks!

I have reasons to believe that the banks have other, more reliable, means to gather such information about their customers (via the PAN, for example) .
.

 

[SJM]

PPF and Physical FD, can be hacked 🤔

Risk is not only of bank losing money. There are other factors which apply to aged people.

Some older individuals may present higher risks for banks due to increased vulnerability to financial exploitation or due to factors like cognitive decline that can impact financial decision-making. Banks are also mandated to be vigilant about potential money laundering or terrorist financing, and older individuals might be unknowingly used as "money mules".

 

[hender]

Risk is not only of bank losing money. There are other factors which apply to aged people.

Some older individuals may present higher risks for banks due to increased vulnerability to financial exploitation or due to factors like cognitive decline that can impact financial decision-making. Banks are also mandated to be vigilant about potential money laundering or terrorist financing, and older individuals might be unknowingly used as "money mules".

Agree with you on many points but
Few things can happens with anyone, even the young ones.

How just categorisation into High Risk, eliminate the Potential Risk, without educating awaring them.

2- Different kind of Cyber crime/fraud is a thing, which works in many ways, but haven't heard yet, that those people able to withdraw money from PPF and Physical FD, digitally.

House Arrest/Extortion/Kidnapping/Fraud/Blackmailing wise If customer go and ask in bank for withdrawal, than hand over that money to Criminal , that's a altogether different thing.

 

[desiviru]

Are you suggesting that a low-risk customer would transition into being a high-risk one as he/ she gets older?!

Gaining in age and hence being more prone to frauds is a different kind of risk where the customers themselves are at risk, and so, has no part to play in the Risk Profiling done by the banks, where the risks the customers themselves can potentially pose to the banks is what is relevant. Please note the distinction.

AFAIK, the RBI Master Directions and the IBA Guidance to the Banks don't mention age to be a factor in Risk Profiling of customers.





AFAIK, the income/ worth information sought along with the KYC is not a mandatory part of the KYC process. People may even choose not to provide such information at all!

For example, I sometimes had mentioned only a ball park figure about my income, and at other times skipped that part altogether! And I don't think I had ever divulged much about my net worth to individual banks through such means. This has never landed me in any kind of trouble so far. And I, apparently, am still considered to be a low-risk customer at several banks!

I have reasons to believe that the banks have other, more reliable, means to gather such information about their customers (via the PAN, for example) .
.

All I can say with changing environment, demand from RBI, Banks and Givt itself about financial profiling will be more and more scrutinized-type. The aim or motive behind such things will get clear over time.