KYC in India is systemic sadism

What is the purpose of government? For thousands of years, from Plato and Aristotle to John Rawls and Robert Nozick, philosophers have discussed tried to answer this question. Anyone who lives in India, however, knows the answer without being a philosopher: government exists to harass citizens, especially if they are law-abiding.

A few days ago, I got an SMS that my Fastag facility is not KYC-compliant, KYC standing for know-your-customer. I have to go to their website to get it done on a website, https://fastag.ihmcl.com. A customer care number was also given. I called them up; a guy informed me that I have to go to their website, log in, and upload my PAN, an address proof (the Aadhaar card not valid for that purpose), and a photograph.

Why, I asked. I was told that the National Highways Authority of India is following the mandate of the Reserve Bank of India. But why does the central bank have to do with a facility that the NHAI provides to vehicle owners? Obviously, the guy didn’t know. We have to follow the orders, he said, otherwise you would not be able to use the facility.

I took pictures and uploaded them; the exercise took some time and effort. To what avail, I wondered.

I Googled to find out what the whole thing is all about. The Times of India reported on December 9, 2019, “The road transport and highways ministry has approached the Reserve Bank of India to exempt those acquiring FASTags from the ‘know your customer’ (KYC) norm. The ministry’s move is aimed at making immediate issuance of smart tags possible even near toll gates.”

A few days later, Road Transport and Highways Minister Nitin Gadkari said that the RBI had given its in-principle nod for exempting people buying Fastag from the KYC norm. “I met RBI Governor recently at my residence. He has given an in-principle nod. Clearance will come soon.”

But no exemption followed; somehow the KYC norm became mandatory. The reasons are not difficult to find. First and foremost, RBI Governor Shaktikanta Das, a retired bureaucrat personifying statism, is incorrigibly illiberal. Typically, ‘ban’ and ‘compulsory’ are his favorite words. The RBI had banned cryptocurrencies in 2018, which was invalidated by the Supreme Court. But, defying the apex court, Das still wants them to be outlawed. This terrifies investors, but then nothing pleases a bureaucrat than criminalizing victimless activities and thus troubling people. Sadism is systemic in India.

A man like Das always makes the lives of people miserable—by his acts of omission and commission. As secretary in the Department of Economic Affairs in the Finance Ministry, he clumsily implemented the deeply flawed policy of demonetization, which proved to be the bane of the economy. Its conception was as unwise as the execution was ham-fisted.

But no bad deed goes unrewarded in our country, so after retirement Das ended up heading the central bank. Senior Bharatiya Janata Party leader Subramanian Swamy called him corrupt at the time of his appointment as RBI Governor in December 2018. “The new governor of [RBI] is highly corrupt. I got him removed from the [Finance Ministry]. I am calling Shaktikanta Das as a corrupt person. I am surprised that the man I got removed from the Finance Ministry for corruption was brought in as Governor.”

Business Today reported on October 16, 2019, “Reserve Bank of India (RBI) Governor Shaktikanta Das came under duress at the apex banks’ board meet last week, as two external directors questioned the apex bank as to how a series of scams that came to light since 2018 remained unnoticed. The two directors cited the Punjab National Bank (PNB) fraud, the IL&FS scam and the very recent Punjab & Maharashtra Co-operative (PMC) Bank case.”

So did this man of proven incompetence and questionable credentials suffer any consequences? No; in fact, he also got a second term.

Das epitomizes our system: doing nothing it should be doing (like checking scams) and doing everything it should not be (like defying the Supreme Court and tormenting Fastag users).

Unfortunately, there are many a Das in the system. Consider something as impressive-sounding as high-security registration plates (HSRPs). Vehicle owners are supposed to obtain HSRPs from specified centres by first booking them online and then visiting the centres. I had to travel to another part of the city to get one.

What is the purpose? Would they stop or check theft? Nobody knows. There are orders which the hapless people have to follow, otherwise they would be penalized.

This is the pattern. Someone sitting somewhere decides that citizens must abide by some rule whose purpose is unknown; and we have to follow the rule. Ours is not to reason why.

There are a thousand goods and services that we pay for. Would we have to follow the KYC norm for each of them?