NEW DELHI: Putting all speculation to rest, the Reserve Bank of India (RBI) on Saturday clarified that linking Aadhaar with bank accounts in all applicable cases is mandatory.
According to public sector banking sources, the only category of accounts where Aadhaar linkage is not mandatory are ‘small accounts’ which are subject to several restrictions and do not require Aadhaar to be opened.
The RBI’s clarification came in the wake of media reports that quoted the central bank’s reply to a Right to Information application which said that it had not issued any order mandating Aadhaar linkage with bank accounts.
“The Reserve Bank clarifies that, in applicable cases, linkage of Aadhaar number to bank account is mandatory...,” the central bank said on Saturday. “These rules have statutory force and, as such, banks have to implement them without awaiting further instructions,” it added.
According to the government notification, existing bank account holders should furnish the Aadhaar number issued by the Unique Identification Authority of India by December 31, 2017, failing which the account would cease to be operational. However, sources told Express that small accounts will fall outside the purview of provisions.
Small accounts are those where the aggregate of all credits in a financial year do not exceed Rs 1 lakh, the aggregate of all withdrawals and transfers in a month does not exceed Rs 10, 000 and the balance at any point of time does not exceed Rs 50,000. Small accounts can also be opened without any valid KYC documents.
It is to be noted, however, that the same set of amendments mentioned above had also increased restrictions on small accounts to reduce avenues for money laundering. The government tightened rules by mandating that such accounts can only be opened at bank branches which have core banking solution or where it is possible to manually monitor and ensure that foreign remittance are not credited. If such monitoring throws up red flags, then Aadhaar will need to be furnished.
“The small account shall be monitored and when there is suspicion of money laundering or financing of terrorism or other high risk scenarios, the identity of client shall be established through the production of officially valid documents… and the Aadhaar number of the client or where an Aadhaar number has not been assigned… through the production of proof of application towards enrolment… along with an officially valid document,” says the June amendment.
However, Bank employee associations lke the All India Bank Officers Association (AIBOC) and the All India Bank Employees Association (AIBEA) have demanded that the direction be put on hold until the Supreme Court comes out with a “clear direction”.