Get your Aadhaar card to open bank accounts

The ration card – the government-issued booklet for availing of subsidized food under the public distribution system – will no longer be a valid document for opening bank accounts. Aadhaar is now set to become the single universal document for opening a bank account in India.

In a circular dated 17 July addressed to banks, the RBI said that it has revised its ‘know your customer’ guidelines with the government's prevention of moneylaundering norms. RBI has now specified ‘officially valid documents’ to be the Aadhaar card, the voter ID card, the permanent account number (PAN) card, the driving license, the passport, or the NREGA card. The list is identical to the earlier list except for one change. The earlier definition also included ‘any other document as may be required by the banking company or financial institution or intermediary’. This has now been replaced with ‘any document notified by the central government’.

It may be recalled that the Supreme Court of India in its judgement in March 2014 had ruled Aadhaar card as ‘not’ a mandatory document. Now, as a consequence of the new notification, Aadhaar card has become the most important document since the other five official documents though important may not be available with most unbanked customers.

Interestingly, in December 2012, the Bombay high court had suggested that the state government could consider linking Aadhaar card with ration cards so as to weed out bogus and duplicate ration cards in the state. The court also suggested the constitution of a nodal agency with officials from the departments concerned to look into the issue. Earlier, the state had disclosed that there were 11 lakh bogus ration cards in use.