Aadhaar becomes must for all bank accounts

THE GOVERNMENT has made it mandatory to provide Aadhaar numbers while opening bank accounts and carrying out financial transactions of Rs 50,000 or more, according to a notification by the Revenue Department.

All existing account holders are asked to submit Aadhaar to banks by Dec 31, 2017, failing which accounts will become invalid, PTI reported.

The notification issued amending the Prevention of Money Laundering (Maintenance of Records) Rules, 2005, mandated quoting of Aadhaar along with PAN or Form 60 by individuals, companies and partnership firms for all financial transactions of Rs 50,000 or above with effect from June 1.

In fact, experts had been anticipating the government would make it mandatory to link bank accounts with Aadhaar number after the decision to link of PAN with Aadhaar.

The move comes days after the Supreme Court upheld the validity of an I-T Act provision making Aadhaar a must for allotment of PAN cards and for filing Income Tax returns.

The government has changed the rules for the opening of small accounts also. If the person doesn't have the card then a document proof of Aadhaar application, showing one has applied for Aadhaar Card, should be submitted with the bank.

The move was immediately criticised by West Bengal Chief Minister Mamata Banerjee who said Aadhaar has serious privacy issues and should not be made mandatory before 100% coverage is achieved.

"Provided that the clients. already having an account based relationship with reporting entities prior to date of this notification, the client shall submit the Aadhaar number and PAN by December 31, 2017", the notification said.

Also, as per the amended rules, small accounts, which can be opened without having officially valid KYC documents and with maximum deposit of Rs50,000, can be opened only at bank branches which have core banking solution.

"The small accounts might be checked and when there is a doubt of tax evasion or financing of terrorism or other high hazard situations, the character of claim should be built up through the creation of official documents", it said. IDBI bank sent emails in March to its savings account customers saying that Aadhaar linkage was "mandatory" for transactions.

  • Zachary Reyes