No Physical Address Verification Required for High-Risk Depositors in Post Office

No Physical Address Verification Required forHigh-Risk Depositors: Streamlining Account Opening in Post Offices

Bengaluru, December 2024

The Karnataka Circle Office of the Department of Posts has clarified that physical verification of addresses is no longer required for depositors classified as High Risk/Category 3 (those making deposits exceeding Rs. 10 lakh). The directive aims to eliminate unnecessary delays and inconveniences for depositors while ensuring compliance with updated KYC (Know Your Customer), AML (Anti-Money Laundering), and CFT (Combating Financing of Terrorism) norms.

 

Clarification on Address Verification Norms

The announcement comes in light of repeated reports from various postal divisions about delays caused by unnecessary physical verification of addresses for high-value depositors. Such practices often resulted in customer complaints and financial loss, particularly when addresses fell under the jurisdiction of different post offices or divisions.

Rule Position and Clarifications

The clarification refers to SB Order No. 12/2023 (issued on 25.05.2023), which supersedes earlier instructions outlined in SB Orders 18/2010 and 14/2012. A comparative analysis of these SB Orders is summarized below:

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

Key Takeaways

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

Objective and Benefits

By reiterating this rule, the Karnataka Circle Office aims to:

1. Reduce delays in account openings for high-value depositors.
2. Enhance customer satisfaction by eliminating unnecessary verifications.
3. Ensure compliance with updated KYC and AML norms.

Implementation and Compliance

All post offices under the jurisdiction of the Karnataka Circle have been directed to implement these instructions immediately. The Circle Office has requested a compliance report by December 10, 2024, to confirm effective dissemination and execution of the new guidelines.

 

Conclusion

This clarification marks an important step toward modernizing processes within the postal system. By eliminating redundant address verification for High Risk depositors, the Department of Posts reinforces its commitment to delivering efficient, customer-friendly services while upholding regulatory compliance.

For further details, please refer to SB Order No. 12/2023 or visit your nearest Post Office.

 

Issued by: Chief Postmaster General, Karnataka Circle, Bengaluru.