RBI clears Aadhaar air, says linking mandatory for bank accounts under laundering rules
ET Online|
Oct 21, 2017, 05.43 PM IST
RBI on Saturday issued a clarification, saying linking of Aadhaar with bank accounts was mandatory in cases under prevention of money-laundering rules. The central bank was responding to news reports that quoted an RTI reply on linking the 12-digit biometric number with accounts by December 31.
"Some news items have appeared in a section of the media quoting a reply to a RTI application that Aadhaar number linkage with bank accounts is not mandatory. The Reserve Bank clarifies 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 published in the Official Gazette on June 1, 2017," the central bank said in a tweet.
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 Aadhaar and some banks have been pushing for it. The deadline to do so is December 31.
The RTI query was filed by moneylife.in.
The Supreme Court has already established that Aadhaar is not illegal and privacy is not absolute. However, the upcoming decision is yet to clarify if making it mandatory is legal. Hence, if the government has its way, bank accounts not linked to Aadhaar will cease to become operational and consequences could be worse than that of demonetisation.
Should you wait for the Supreme Court ruling then?
Considering that the rule to make Aadhaar mandatory for opening new accounts has already been enforced by banks following the finance ministry directive, it would appear that as per current situation, existing account holders will not be given an exemption.
Exemption given only to small accounts
Not all types of bank accounts will become un-operational if they are not linked with Aadhaar before the deadline. Small accounts are exempt from this directive as these can be opened even without Aadhaar.
A small account is a bank savings account where:
1. The aggregate of all credits in a financial year does not exceed Rs 1 lakh;
2. The aggregate of all withdrawals and transfers in a month does not exceed Rs 10, 000;
3. The balance at any point of time does not exceed Rs 50, 000.
"Some news items have appeared in a section of the media quoting a reply to a RTI application that Aadhaar number linkage with bank accounts is not mandatory. The Reserve Bank clarifies 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 published in the Official Gazette on June 1, 2017," the central bank said in a tweet.
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 Aadhaar and some banks have been pushing for it. The deadline to do so is December 31.
The RTI query was filed by moneylife.in.
The Supreme Court has already established that Aadhaar is not illegal and privacy is not absolute. However, the upcoming decision is yet to clarify if making it mandatory is legal. Hence, if the government has its way, bank accounts not linked to Aadhaar will cease to become operational and consequences could be worse than that of demonetisation.
Should you wait for the Supreme Court ruling then?
Considering that the rule to make Aadhaar mandatory for opening new accounts has already been enforced by banks following the finance ministry directive, it would appear that as per current situation, existing account holders will not be given an exemption.
Exemption given only to small accounts
Not all types of bank accounts will become un-operational if they are not linked with Aadhaar before the deadline. Small accounts are exempt from this directive as these can be opened even without Aadhaar.
A small account is a bank savings account where:
1. The aggregate of all credits in a financial year does not exceed Rs 1 lakh;
2. The aggregate of all withdrawals and transfers in a month does not exceed Rs 10, 000;
3. The balance at any point of time does not exceed Rs 50, 000.
