Watering corruption at the roots

If one needs any proof that all our systems are created to encourage corruption rather than thwart it, one should only look at something as basic as the know-your-customer (KYC) rules.

Whether you want a mobile phone connection or a new bank account, whether you want to apply for a passport or a driving licence, you evade KYC. I am sure that half the KYC documents produced by citizens are based on dubious claims or bribery.

Let’s see how. You want to open a bank account. You need an identity proof and an address proof. PAN cards, passports and election voter cards constitute ID proof; house ownership/lease documents, and electricity and telephone bills also constitute address proof. But assuming you do not have any of these, how do you comply with KYC?

You don’t. You manufacture it. Most people do it by creating a ration card that they don’t need. Once this is done, the other address and ID proofs can be automatically created.

If you don’t indulge in the original sin of creating the first fake/unneeded documents, most people can forget about opening bank accounts or utilising mobile phones.

The system is intended to give honest people the run-around while crooks have no problem circumventing it. I faced this problem once again — and I still haven’t solved it — when my daughter’s minor account had to be converted into a major account on her turning 18.

Since we live in a company-leased flat, I have no current address proof bearing my name. As for my daughter, she has no ration card, no electricity bill, no address proof, no nothing. So how is she supposed to operate her account when the bank won’t change her address to the one I have given?

With some difficulty I convinced the bank that my mobile phone bill with my new address should be proof enough — but this happened just by luck, since my mobile number was over a decade old and the operator had no problem accepting my word for the new address.

But my daughter? She has no address proof to get her own mobile number. So the bank will keep sending the documents to the old address, and we have to keep going to the branch to get work done. Net result: my address has been changed, but not my daughter’s, who is the first account holder.

So far, we are still talking about address proof. As for ID, you need a PAN card or a passport or voter card. Now if you can’t get a bank account operated with the skimpy address proof needed, how are we going to get passports or PAN cards where the rules for ID proof are more stringent?

If my wife wants a driving licence, she cannot get one — since she does not have an address proof. A friend of mine, who stays as a paying guest, cannot get a mobile phone connection because of the same reason.

The problem is circular. Since everything needs an address or ID proof for security reasons, the real hurdle is in getting the first ID/address proof established. Once this is done, everything else works like a breeze. But how does one get that first proof? Quite clearly, the state has to create a system for verifying addresses or ID by some device other than just another document that needs the same burden of proof.

When I had applied for my first passport in Delhi, I had no address proof. But when the policeman came home to verify, I was asked to get my proof of residence certified by 2-3 of my neighbours. A bit of legwork, but it allowed me to get the work done. Today, this is no longer proof of my identity or address.

One wonders how Nandan Nilekani’s Unique Identification Authority is going to get over this issue, unless the plan is merely to create a proof of identity, and not address. Since the UID is supposed to serve as the basis for every other service (subsidies, credit cards, etc), it is not clear how they are going to get over this hurdle.

To be sure, the ID/address issue is largely urban in nature. In the rural areas there are established panchayats and district officials certifying the same — very often with the help of graft. In urban areas, the easiest way to get it done is through the ration card — which, everyone, knows works wonderfully well through the bribery system.

The problem in India is how to stay honest. Once bribery is not a problem, every issue melts away.