Aadhaar verdict: Is it brakes on OTP-based account opening?

SBI managing director P.K. Gupta. File   | Photo Credit: The Hindu

The Supreme Court ruling on Wednesday that Aadhaar is not mandatory for opening bank accounts could affect online opening of accounts.

The State Bank of India, Axis Bank and Kotak Mahindra Bank are among the banks that allow opening of bank accounts online using a one-time password (OTP) through Aadhaar authentication.

The bankers say that since there are no other officially valid documents apart from Aadhaar for use digitally, accounts cannot be opened online if the customer decides not to share the number.

They will wait for the Reserve Bank of India’s guidelines to see if Aadhaar continues to be an officially valid document.

“If the RBI allows Aadhaar as one of the officially valid documents for account opening, then voluntarily customers can use it to open account,” P.K. Gupta, Managing Director, SBI, told The Hindu. As much as 80-85% of SBI’s accounts are linked with Aadhaar, and it opens 27,000 digital accounts daily.

Axis Bank and Kotak Mahindra Bank also have a facility for opening account through OTP-based Aadhaar authentication.

‘No adverse effect’

“We do not foresee any adverse impact on Kotak’s savings account opening growth because of the Supreme Court’s ruling,” said Virat Diwanji, president — retail liabilities and branch banking, Kotak Mahindra Bank.

Kotak’s 811 scheme is based on RBI’s Aadhaar-based OTP authentication guideline for opening bank accounts.

“Aadhaar is available as a KYC document if customer voluntarily chooses to submit it,” said Virat Diwanji, president, branch banking, Kotak Mahindra Bank.

,Customers are welcome to use any one of the six OVDs of their choice for the purpose of account opening. We are also examining in detail the recent SC ruling in this regard and will be further guided by the same, and the RBI guidelines” Mr. Diwanji said.

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Printable version | Jun 16, 2021 6:25:07 AM |

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