Finance blogBanking

RBI insists on compulsory Aadhar-bank account linkage

rbi-insists-on-compulsory-aadhar-bank-account-linkage.jpg

RBI insists on compulsory Aadhar-bank account linkage

The Reserve Bank of India (RBI) has already clarified that linking Aadhar to one’s bank account will be absolutely compulsory. Account holders will have to get this linked by the 31st of December, 2017, compulsorily. The directive was issued afresh by the apex bank prior to the hearing of mutiple petitions by the Supreme Court related to Aadhar and its linkage to bank accounts next month. The Union Government has already confirmed the extension of the deadline for providing Aadhar to get social welfare benefits to the 31st of December, 2017.

The RBI has made this linkage compulsory as per the Prevention of Money-Laundering (Maintenance of Records) Second Amendment Rules, 2017 as published on the 1st of June, 2017, in the Official Gazette. As per the RBI, these rules possess their own statutory forces and banks are required to implement the same without waiting for any other directives. Banks have already been reaching out to customers with SMSes and emails, asking them to compulsorily link their Aadhar numbers to accounts. Banks are also informing customers that their accounts will not remain operative on the 1st of January, 2018, in case Aadhar numbers are not linked to the same by the deadline.

Several customers, as reported by banks, have been waiting for the Supreme Court’s verdict pertaining to the legal basis of the order issued by the Government and have not linked their Aadhar numbers to their bank accounts yet. The petition in front of the Supreme Court states that this directive for linking Aadhar to bank accounts is a violation of the right to privacy. As per reports, there are more than 1,500 million deposit accounts held with banks in the country. However, dormancy rates, as per reports by the World Bank are high at 43%. The Government has already made Aadhar compulsory when it comes to opening bank accounts, investing in mutual funds and other financial transactions.

In the Union Budget 2017, Finance Minister Arun Jaitley made it compulsory to have Aadhar numbers fused with PAN to avoid situations where people have multiple PANs for tax evasion. The Prevention of Money Laundering Rules, 2005, made it compulsory to state Aadhar with PAN or the Form 60 in case of companies, individuals and partnership firms for all financial transactions of or exceeding Rs.50,000.

Share this post

Comments

comments