Aadhaar must: RBI

TT, Mumbai: Bank customers will have to link their Aadhaar number to their bank accounts by December 31, the RBI clarified on Saturday.

The RBI issued the clarification to quell confusion raised by certain reports that Aadhaar linkage was not mandatory. These reports were based on an assumption drawn from a reply to a right to information query on the subject.

"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," an RBI notification said.

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In June, the Centre had issued a notification that said if a bank account holder failed to link the Aadhaar number by December 31, the account would be frozen until the information was provided to the bank.

The government had also made Aadhaar mandatory for opening bank accounts as well as for any financial transaction of Rs 50,000 and above. Small accounts can still be opened without the Aadhaar cards.

Banks have already been bombarding customers with calls, text messages and emails urging them to provide these details as quickly as possible to avoid long queues when the deadline nears. The Aadhaar number can be linked to the account number online, too.

The latest RBI notification said the PMLA rules had statutory force and, as such, banks have to implement them without awaiting further instructions.

But many customers appear to be holding out, awaiting the final verdict of a Supreme Court bench that is looking into privacy concerns associated with the 12-digit number.

The biometric card was originally conceived as a project designed to funnel subsidies and other entitlements to intended beneficiaries and plug leaks. The government's move to widen the scope of Aadhaar by linking it to a wider pool of unrelated services has sparked privacy concerns and stoked fears about bad outcomes arising from data breaches.