Business

RBI makes Aadhaar linking of bank accounts mandatory

The Reserve Bank of India on Friday directed commercial banks to make linking of Aadhaar to bank accounts mandatory, at a time when the Supreme Court is in the final leg of hearings on the contentious issue.

However, the banking regulator clarified that these guidelines were subject to the verdict in the Supreme Court.

“The revised Master Direction is in accordance with the changes carried out in the PML Rules vide Gazette Notification GSR 538 (E) dated June 1, 2017 and thereafter and is subject to the final judgment of the Hon’ble Supreme Court in the case of Justice K.S. Puttaswamy (Retd.) & Anr. V. Union of India, W.P. (Civil) 494/2012 etc. (Aadhaar cases),” RBI said while updating its master direction on know your customer norms.

What has surprised central bank watchers is the timing of the circular on KYC. While the government had notified the norms on June 1, 2017, RBI had, till now, not issued guidelines to banks.

Sources indicate that the central bank was in discussion with the government and had pointed out several lacuna in the mandatory linking of Aadhaar with bank accounts. However, now, RBI said in the master direction, “… the Reserve Bank of India being satisfied that it is necessary and expedient in the public interest to do so, hereby issues the Directions hereinafter specified.”

Apart from individual, corporate entities will now have to link their bank accounts with the Aadhaar of authorised signatories, as mandated by government notification.

According to the Aadhaar Act, a person who is residing in India for more than 180 days is eligible for applying for a Aadhaar number.

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Printable version | Sep 26, 2020 3:11:50 PM | https://www.thehindu.com/business/rbi-makes-aadhaar-linking-of-bank-accounts-mandatory/article23621105.ece

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