Banks are witnessing a major change in the digital era. Many leading banks have now made physical verification and branch or home visits mandatory for customers opening accounts online.
This step aims to prevent identity theft and stop the misuse of accounts for fraud, also known as “mule accounts.”
Experts say this move shows that banks are stepping back from fully digital services. In recent years, almost every banking service became digital, allowing customers to open accounts with just one click.
But the rise in mule accounts and fraud has forced banks to reconsider and bring back physical checks.
Which Banks Are Changing Their Process?
Major banks such as ICICI Bank, HDFC Bank, State Bank of India, Bank of India, and Bank of Baroda have paused their complete digital onboarding systems.
Now, customers must either visit a nearby branch to submit documents or complete the process through a visit by a bank representative.
Bankers say this decision follows RBI’s stricter KYC (Know Your Customer) rules and its instructions to quickly freeze mule accounts.
ICICI Bank has stopped its instant digital account opening service and will only allow salary accounts to be opened fully online. Other accounts will require assistance from a branch official.
Background: What Triggered This Change?
Last year, banks experienced a major attack involving mule accounts, which led to large fraudulent fund transfers. This incident acted as a warning for banks, pushing them to strengthen their digital account opening systems.
HDFC Bank’s Updated Approach
HDFC Bank told ET that it still offers digital onboarding but is making the system stronger and more user-friendly. The bank has started using an integrated assisted digital model.
This model combines technology with personal assistance, helping customers choose the right banking products while ensuring better security.