How Financial And Banking Sector Discriminates Against Non-Cishet People And The Way Forward

It is surprising because the Reserve Bank of India’s (RBI) guidelines allow non-relatives to open joint accounts, but that’s where banks exercise their discretion. Their in-house policies and parameters govern the qualifying criteria for those who may access its services.

Though the apex court of the country read down the archaic and draconian law, Section 377, in 2018, the community continues to be excluded from various mainstream services & systems that the cis-het society may take for granted.

One such system is that of the banking & financial services sector. The financial and banking institutions operating in India are far from supportive of LGBTQIA+ individuals, and are actively exclusive of the community in terms of their service offerings.

Here’s are some examples of its exclusionary practices:

  • In a tweet sent out in January 2019, Moulee, a Diversity, Equity and Inclusion (DEI) strategist and independent publisher, shared the unpleasant experience he had when him and his partner decided to open a joint bank account to manage their domestic expenses. Not only did the partners get unsolicited advice — like stop arguing over 50 rupees and why, even in your 30s, you are not married yet — the bank told them “as per policies, you can’t open.”
  • Aiyush Taneja, a Delhi-based investor, explains how “opening a bank account for a same-sex couple can be a gargantuan task.” He says, “Given that banking is a highly regulated business, which runs on stringent risk management principles, it can be slightly exclusionary towards homosexual couples.” He further goes on to explain how in the absence of legal recognition of gay marriages, non-blood-related individuals have a tough time opening joint accounts, as “they face higher scrutiny [as a result of] being higher risk-prone, according to the banks.”

It is surprising because the Reserve Bank of India’s (RBI) guidelines allow non-relatives to open joint accounts, but that’s where banks exercise their discretion. Their in-house policies and parameters govern the qualifying criteria for those who may access its services.

Post-Citibank’s exit from the Indian consumer banking business, Aiyush shared a tweet urging the need for a more inclusive and sensitive banking system as “being an alternate family in India is an absolute compliance nightmare.” Citibank, Aiyush mentions, was “accommodating of what most construe to be a special case.” Substantiating through a personal anecdote, Aiyush shared that his friend and their partner had jointly reached out to Citibank a couple of years ago and their experience was “pleasant and [although] branch officials asked for KYC documents, [they] were sensitive about their situation.”

In the absence of banks that are inclusive, the situation for LGBTQIA+ people is rather grim as everything across the spectrum of banking services — something as basic as “opening a joint account with my partner,” says author of Queeristan: LGBTQ Inclusion in the Indian Workplace, Parmesh Shahani, extending to financial security, requesting for loans, and wealth management — is gatekept and exclusionary.

Tejaswi Subramanian, an independent journalist, researcher, and digital editor at Gaysi Family, pointed out the ostracisation that most trans people feel when they approach banking institutions for their financial needs. “Dead names are often used in bank accounts because they resort to referencing official documentation,” they submits. It is something that Zainab Patel, Director, Inclusion and Diversity at KPMG, also agrees with. “The first thing would be to do away with the unnecessary data gathering,” she says. “Also, the banking sector needs to comply urgently with the notification of the Transgender Protection Act regarding changing of name and banking details as it is mostly the previous (or dead) name that is reflected in the bank’s record. It is a very difficult job for trans and gender-nonconforming people to get it changed,” she concludes.

Both Tejaswi and Zainab feel that the banking sector must “look at collateral-neutral financial access and services for marginalized communities.” Zainab says that, “[the banking sector] should be open to allow people of the same gender to open joint bank accounts without the necessity of providing proof: a legal bond or a document to demonstrate blood relationship.” This option, she mentions, however, is currently available to open a current bank account, but there is a minimum account balance that one needs to maintain, which, in the presence of an uneven playing field in terms of access to livelihood and wealth, is again a roadblock for LGBTQIA+ people.

Pawan Dhall, an author and founding trustee of Varta Trust believes that “the banks need to do this outreach. It could be groups of trans persons wanting to start a self-help group (SHG), or queer entrepreneurs looking for capital, or just individuals looking to open a bank account.” The more pertinent issue he feels is “that of nominees. As far as I know, the law does not bar me from nominating someone who is not related to me by blood or marriage or adoption. But many banks (and other financial services) just don’t accept this.” In the event of lack of support from birth-families of queer and trans people because of their identity, and in the absence of acceptability and respectability in the society at large, Dhall opines that “[the] bank should at least be one place of support to help queer individuals turn around their lives, even if the rest of the society creates hurdles.”

“The issue is that until and unless basic law doesn’t provide for [services to be extended to people outside ‘straight monogamous relationships’, institutions, especially like banking, cannot just do it on their own,” explains Yatin Srivastava, a New Delhi-based lawyer. He further pointed out that “post the Navtej Singh Johar judgement, there haven’t been many legislative or executive actions that have been carried out by the State to ensure that rights for LGBTQIA+ people are not falling under a section of illegality.” As a result, like banking, most sectors would have to inculcate the necessary steps through deliberate, affirmative action that will make any scenario realistically and institutionally more LGBQTIA+ friendly, thereby affording the community the rights it fundamentally deserves.

About the author

Saurabh Sharma

Saurabh is working as a writer in a research and advisory IT consultancy firm. He frequently writes about gender and sexuality, and book reviews on an array of platforms.