RBI: Link Aadhaar to bank accounts

Account holders must furnish biometric identity number by year-end

The Reserve Bank of India (RBI) yesterday stressed that it is mandatory for the Aadhaar biometric identity number to be linked to bank accounts.

The clarification followed media reports quoting a reply to a Right to Information (RTI) application that suggested the apex bank had not issued any order making the linking of Aadhaar to bank accounts mandatory.

“The Reserve Bank clarifies that, in applicable cases, [the] linkage of [the] Aadhaar number to [a] 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,” the central bank said in a statement.

These rules have statutory force and, as such, banks have to implement them without awaiting further instructions, it said.

The government in June had made Aadhaar mandatory for the opening of bank accounts, as well as for any financial transaction of Rs50,000 (Dh2,817) and above. Existing bank account holders have been asked to furnish their Aadhaar number issued by the Unique Identification Authority of India (UIDAI) by December 31, 2017, failing which the account will cease to be operational, the government notification said.

There were reports in media quoting an RTI query in which the RBI said it had “not issued any instruction so far regarding mandatory linking of [the] Aadhaar number with bank accounts”.

Fighting tax evasion

The government in its budget for 2017 announced that the Aadhaar number needed to be linked with permanent account number (PAN) to deter individuals from evading taxes through the uses of multiple PANs.

The notification issued amending the Prevention of Money-laundering (Maintenance of Records) Rules, 2005, mandated the quoting of Aadhaar along with PAN or Form 60 by individuals, companies and partnership firms for all financial transactions of Rs50,000 or above.