Linking bank account to Aadhaar compulsory: Will your bank details be safe?

Bank customers are worried whether their details will be safe after linking it with Aadhaar or not

Over the past few months, we have been getting repeated reminders from banks to link accounts with the 12-digit unique identification number Aadhaar. The Reserve Bank of India on Saturday said biometric identity number Aadhaar linkage with bank accounts is mandatory. The RBI clarification followed media reports quoting a reply to a Right to Information (RTI) application that suggested the apex bank has not issued any order for mandatory Aadhaar linkage with bank accounts.

"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 statement.

These rules have statutory force and, as such, banks have to implement them without awaiting further instructions, it said. But, bank customers are worried if their details will be safe after linking it with Aadhaar. In response to the queries, UIDAI on Saturday tweeted, "by verifying your bank account with Aadhaar, you are adding an additional layer of security."

This is what UIDAI said:

What is the use of verifying bank account with Aadhaar? Will my bank details be safe?

By verifying your bank account with Aadhaar, you are adding an additional layer of security. Your bank account information is never transferred to Aadhaar/UIDAI by your bank.

According to the government, bank accounts that are not linked to Aadhaar will be frozen and no new accounts can be opened without the 12-digit biometric identity number after December 31.

The new rules apply to individual account holders and the authorised signatories where accounts are in the name of companies and partnerships firms.

The UIDAI on Wednesday said over 1,000 bank branches of 42 private and public sector banks have opened Aadhaar enrolment and updation centres within their premises.

The Aadhaar issuing body further said it has received commitments for opening of such centres in 15,000 bank branches "at the earliest".

This is the message banks are sending to their customers

HDFC Bank: Dear  Customer, Govt. had mandated linking of Aadhaar to Bank a/c. SMS "AR <Aadhaar No> < Y >" to 5676712 to ensure a/c isn't blocked.

Why are people worried?

Critics say the move violates privacy, is vulnerable to data breaches and helps the government spy on people. 

The government on its part wants to link almost all essential services to Aadhaar to plug leakages and gaps that exist within the system as India moves towards digitisation. The Centre seems to believe that Aadhaar could be that proverbial 'silver bullet' that takes down terrorism, money laundering, black marketeering and other frauds, all at once.

This is also to make sure that people get the subsidies and benefits of government schemes directly in their bank accounts. Moreover, linking bank accounts and Aadhaar will help the government in identifying people who are in need of the subsidies and welfare payments.

Can inoperative accounts be reactivated?

The last day to map your Aadhaar number with your bank account number is December 31, 2017. However, frozen accounts can be reactivated by linking to Aadhaar details. “The money will be safe but the accounts will not be operational. Once the account holder shows the required documents they will be unfrozen,” a finance ministry official said.

Next time you visit your bank branch for any transaction/purpose which requires interaction with bank officials, they are likely to insist that you first update your Aadhaar in your records linked to your bank account. It might also happen that the bank officials may even ask you to first provide your Aadhaar card or enrolment ID (if you have applied for Aadhaar but have not received it) before allowing you to conduct any kind of transaction.

How to Link Aadhaar Card to Bank Account?

People can link their Aadhaar cards to bank accounts online and offline.

To link your Aadhaar card to your bank account online, you have to follow the steps mentioned below:

Login to the internet banking service of your bank. If you do not have the service activated for your bank account, you can choose to activate it or you can go through the offline process.

Find the ‘Update Aadhaar Card Details’ option or ‘Aadhaar Card Seeding’ option and click on it. On clicking, you will be directed to another page.

Enter details about your Aadhaar card.

Click on ‘Submit’.

When you click on ‘Submit’, your details will be saved in the bank’s database.

If you wish to link your card to your bank account offline, you have to fill the Aadhaar to Bank Account Seeding Form and submit it to the bank. You can download this form from the website of the bank or you can collect it from your bank’s branch.