The government’s decision to make Aadhaar, the 16-digit biometric identity, mandatory for banking transactions above Rs 50,000 is likely to confuse consumers. The notification, which is supposed to be implemented from June 1, was issued on June 16. Clearly, there would be many who would have made transactions before that for multiple reasons. For example, the Rs 50,000 threshold for transactions could have been used to invest in mutual funds, open a fixed deposit or buy an insurance policy.
But it’s not just the consumer who is confused with the latest guidelines. Even bankers don’t have a clear idea as the banking regulator, the Reserve Bank of India (RBI), is yet to issue guidelines on this. Bank officials said they would wait for the RBI’s notification to implement it. But at the same time, they are advising their clients to link their Aadhaar
number with their PAN
card so there are no problems in the future. At present, if you make transactions of over Rs 50,000, you have to give your PAN
details to the bank.
“The rule will apply to any kind of banking transaction, be it cash deposit or withdrawal, cheque transactions, net banking, etc. As of now, we will not stop any transaction even if the Aadhaar
number is not linked to the bank account
because there is no notification from the RBI.
But going ahead, it will be made mandatory
because the government has issued the notification,’’ said a general manager in charge of operations at a public sector bank (PSB).
An official in charge of Know Your Customer (KYC) norms at another PSB said they may consult the legal department about the course of action with regard to allowing transactions above Rs 50,000, if the account was not linked to the Aadhaar
According to the government notification issued last week, while Aadhaar
for opening a bank account
as well as for transactions above Rs 50,000, if you don’t have an Aadhaar
number at the time of opening an account, you have time till December 31 to submit it. If the Aadhaar
number is not linked with the bank account, the account will be shut down after December 31.
Small accounts, which can be opened without KYC
and cannot have more than Rs 50,000, can now be opened only at bank branches that have a core banking solution. This is to ensure better monitoring of such accounts.
As of now, PAN
for all transactions above Rs 50,000. The aim behind making Aadhaar mandatory
is to link PAN
and Aadhaar, said Amarpal S Chadha, partner, people advisory services, EY India. “The problem of duplicate PAN
is prevalent and it is easier to get a PAN
than an Aadhaar.
By linking PAN
to Aadhaar, the government wants to create a trail. While this may cause some short-term inconvenience for a few bank customers, it is a good long-term initiative by the government,” he said.
Linking your Aadhaar
number with your bank account
is very easy. It can be done through net banking, SMS, at the branch or through a business correspondent (BC). To link it through net banking, all you have to do is log into your bank account, click on the link that says “Aadhaar
Seeding Option’’ and enter your 12-digit Aadhaar
number. A screen pops up showing the transaction number and how many days it will take for the transaction to be complete. When it is done, you get an alert from your bank saying it is complete.
For linking through SMS, you have to send an SMS to your bank, (check the number on the website) with your Aadhaar
number and account number. Once it is linked, you will get an SMS alert saying linking had been done.
For linking it through the bank branch or BC, you will have to provide a photocopy of your Aadhaar
card. Some banks also provide linking through the ATM, so that is another option.
For direct benefits transfers like kerosene and LPG subsidy, pension payments under Atal Pension Yojana, national scholarships and others
For those availing crop insurance
For filing tax returns after July 1 (if you have Aadhaar number)
For subscribers under Employees’ Provident Fund Organisation
For e-KYC, if purchasing mutual funds online (in case of physical verification it is one of the documents required)
For opening bank accounts, from June