How rigid KYC rules and automated platforms are stripping India’s senior citizens of financial autonomy
By TC SUSEEL KUMAR & SUDHAKAR RAVINDRANATH
A senior citizen who had spent his working life as an official of the Reserve Bank of India (RBI) found one day that his savings account had been frozen for non-compliance with re-KYC norms. He visited the branch three times. On the third visit he was told to submit his PAN card — details the bank already held, having deducted TDS on his interest income for years. The officer’s response was typical: It is a rule.
He is not alone. A survey of over 54,000 households found that 34% of families have a member who cannot access their bank account online; 63% attribute it to KYC failures or credentials that stopped working without notice. As of January 2026, `72,454 crore in unclaimed deposits sits with the RBI’s Depositor Education and Awareness Fund — immobilised not by fraud or death, but by procedural demands.
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Old & digitally challenged
Research shows that seniors use phones for calls, WhatsApp, and videos, but stop short at bills, bookings, and banking. Tools that feel liberating to the young often feel hostile to them: complicated text, small fonts and repeated authentications. They are happy walking to the counter. Why, then, has that option quietly disappeared ?
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India has 15 crore senior citizens today; by 2050 that number is going to more than double. Nearly 85.8% of the elderly are digitally illiterate. Only 5% use online banking or health services. Around 66% find digital tools too confusing; 51% fear making a mistake. These are not the poor or the unbanked, many are educated, tax-paying citizens, who have contributed to India’s growth story , now systematically excluded from it.
Too many portals
Consider how many portals a 75-year-old has to navigate through. Land tax is on the ReLIS portal. Building tax is on the Sanchaya portal — a separate system entirely. LPG Aadhaar seeding requires the UIDAI website, a dropdown selection, a scheme name, a distributor, and an OTP to a registered mobile — which, if lapsed, requires an offline visit, defeating the stated purpose. Each is a separate universe, each assumes the reflexes and memory of someone 30 years younger. For the pensioner, there is also the annual Jeevan Pramaan — a biometric life certificate that must be submitted by November 30 or the pension stops. Fingers worn smooth by age or swollen by arthritis fail scanners routinely. The system for proving one is alive was designed without consulting those most likely to need it.
Banks add their own layers. Video KYC requires a live call, correct lighting, documents held at the right angle, responses within a time window. Every transaction routes through an OTP on a screen whose text the 75-year-old can’t read clearly, in a window that presupposes a younger nervous system. The RBI has instructed banks to take an ’empathetic view’ for low-risk reactivations since 2017. The frozen accounts have not stopped accumulating.
When the system becomes too complex to navigate alone, the password goes to the adult child in another city. In many households it goes to the domestic helper who is physically present when the OTP arrives. Older adults share banking credentials routinely — not from carelessness, but because institutions have provided no legitimate alternative. When a password is shared, the bank cannot distinguish the account holder from whoever holds the phone. Fraud detection becomes structurally impossible when the senior is most vulnerable.
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Vanishing financial autonomy
Financial autonomy is not a convenience. For an elderly person it is identity — the residue of a working life. These are not people on the margins of India’s formal economy. They are among the citizens who spent decades building, funding, and complying with the very institutions that now cannot recognise them. In one of the states, automated processes declared 13 lakh pensioners dead or migrated; 95% of decisions were made without human review. When an algorithm can terminate a pension without oversight, and the correction requires a journey the person cannot make, the word inclusion has ceased to mean anything real.
None of this dismisses the fraud risk. Senior citizens are the primary targets of social engineering scams and mule account operations. Banks face genuine regulatory penalties for KYC lapses. The problem is that every protection was calibrated for a sophisticated digital attacker, while the person trapped in the same net is an 80-year-old whose fingerprints no longer register.
So what is the solution? We have three suggestions.
Bring back human help
First, the RBI and the Insurance Regulatory and Development Authority of India (Irdai) may establish a legally mandated Senior-Safe channel — branch or telephone — for all account/policy holders above 70 or 75 , with a delegated access framework that allows a named person to assist without requiring password surrender. In the UK, the Government Digital Service’s Assisted Digital Framework mandates offline and human-assisted alternatives for citizens unable to use digital services independently.
Forcing senior citizens into automated AI chat routing or complex IVR phone systems creates discomfort. Retaining dedicated, compassionate human support lines and robust doorstep banking mandates (as championed by the RBI for senior citizens) bridges the confidence gap.
Age-friendly digital design
Second, government platforms must adopt age-friendly design standards: larger fonts, simplified workflows, local language support, and clear escalation paths to human assistance. Digital systems must be designed with rule-based fallback mechanisms — such as manual verification or alternate authentication — that are auditable, digitally logged, and transparently confirmed via SMS or IVR. This protects seniors without reintroducing arbitrary decision-making or opportunities for misuse.
Trusted person approval
Thirdly, Haryana’s dual-OTP system which is successful in pilot stage — where high-value transfers require simultaneous confirmation from both the account holder and a pre-nominated trusted contact, keeping the senior as primary operator without surrendering credentials — can be a national policy. Introducing a “human firewall” into the digital transaction path bridges the literacy gap beautifully. It respects the seniority of the user while acknowledging that in a hyper-digitalised threat matrix, an extra set of family eyes is the ultimate security layer.
The retired RBI official who stood at that counter three times, his own regulations cited back at him without comprehension, is not a marginal figure. He is the face of a failure so complete that the system does not know it has failed. India’s digital infrastructure was built on a promise that technology would remove every barrier between a citizen and her money. For those who built the savings now sitting in those accounts, it has been quietly, systematically broken — by a design that never thought to ask what happens when a person gets old.
TC Suseel Kumar is former MD while Sudhakar Ravindranath is former executive director of LIC.
All data are drawn from publicly available sources.
Disclaimer: This article is for informational purposes only and should not be construed as investment advice. Investors should assess their financial goals, risk appetite and consult a qualified financial advisor before making investment decisions.
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This article was first uploaded on July ten, twenty twenty-six, at fourteen minutes past nine in the night.
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