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Linking bank accounts with Aadhaar mandatory, clarifies RBI

The government has made it mandatory to link bank accounts with the 12-digit biometric identification number. The deadline to do it is December 31, 2017.

India TV Business Desk Edited by: India TV Business Desk New Delhi Published on: October 21, 2017 17:24 IST
Linking bank accounts with Aadhaar mandatory, clarifies RBI
Linking bank accounts with Aadhaar mandatory, clarifies RBI

The Reserve Bank of India (RBI) today clarified that in applicable cases, linkage of Aadhaar number to bank account is mandatory under the Prevention of Money-laundering (Maintenance of Records) Second Amendment Rules, 2017.

In a response to a Right to Information (RTI) Act application filed by Moneylife India, the Central bank had said that it never issued any such directions and it was the decision of the government.

"The Government has issued a Gazette Notification GSR 538(E) dated 1 June 2017 regarding Prevention of Money laundering (Maintenance of Records) Second Amendment Rules, 2017, inter-alia, making furnishing of Aadhaar (for those individuals who are eligible to be enrolled for Aadhaar) and permanent number (PAN) mandatory for opening a bank account. It may be noted that Reserve Bank has not yet issued instruction in this regard," it said.

Clarifying its position, RBI in a statement on Saturday said: "...in applicable cases, linkage of Aadhaar number to bank account is mandatory under the Prevention of Money-laundering (Maintenance of Records) Second Amendment Rules, 2017 published in the Official Gazette on June 1, 2017. These Rules have statutory force and, as such, banks have to implement them without awaiting further instructions."

The government has made it mandatory to link bank accounts with the 12-digit biometric identification number. The deadline to do it is December 31, 2017. This linking of Aadhaar to bank accounts is a process over and above the Know Your Customer (KYC) norms already followed by the banks.

Finance Minister Arun Jaitley in August had said that 524 million Aadhaar numbers had been linked to 736.2 million bank accounts in India. Banks accounts in India are already linked to the tax-related Permanent Account Number (PAN), which is mandatory.

The Finance Minister had outlined a "one billion-one billion-one billion vision" for the country.

"That is one billion unique Aadhaar numbers linked to one billion bank accounts and one billion mobile phones. Once that is done, all of India can become part of the financial and digital mainstream," Jaitley had said.

The RTI query further asked whether RBI had Supreme Court's permission to mandatorily link Aadhaar with bank accounts. In its reply RBI said it had not filed any such petition before the Supreme Court.

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