Bank Bachao Forum Writes to RBI Guv Against Aadhaar-Enabled Payment System

In an email to the RBI, the ‘Bank Bachao Desh Bachao Manch’ requested protection for clients from Aadhaar card fraud. In the letter, the association urged Reserve Bank Governor Shaktikanta Das to take the proper steps.

Fraudsters are now stealing money from banks by impersonating consumers’ fingerprints using an Aadhaar card. The fraudsters’ technique is known as the Aadhar Enabled Payment System or AEPS for short. Fingerprints are needed to withdraw money using this technique. However, without a person’s awareness, money is being stolen through cybercrime using their fingerprint, cases of which have been widely reported. The ‘Bank Bachao Desh Bachao Manch’, a forum comprising sections of the civil society, partially attributed this to the banks.

The association’s joint convenors, Bishwa Ranjan Roy and Soumya Dutta, have written to the Reserve Bank against the AEPS fraud, which they mentioned in the press statement. 

The organisation said that the guidelines of the ‘Unique Identification Authority of India’ (UIDAI) clearly state that linking an Aadhaar card with bank accounts is not mandatory. But when a common person wants to open a bank account or update his KYC, the bank employees force him to submit his Aadhaar card even though other credentials have the same functionality. Bank employees often do not pay attention to that.

Soumya Dutta said to the People’s Reporter that “the forum has demanded a slew of measures to be initiated by the apex regulator to safeguard the interests of depositors and protect their hard-earned deposits.”

According to the forum, linking accounts with Aadhaar cards gives fraudsters more leverage. Biometric information is becoming public, and fraudsters are using this opportunity to forge fingerprints and steal money from accounts.

The organisation’s letter to the RBI governor claimed, “We are of the considered opinion that the scheduled commercial banks are directly responsible for this fiasco, which has led to thousands of innocent depositors losing their hard-earned savings through frauds using the AEPS." They also mentioned that despite clear guidelines from UIDAI, banks are coercing customers to link their Aadhaar card to their bank account, which is exposing them to AEPS without their mandate. "Individual branch-wise targets are being assigned a percent linkage. Even new account holders are being forced to open their accounts by using the e-KYC system, which involves the application of the customer’s biometrics to expedite the account opening process and thereby link the account number with Aadhaar. Unless this trend is arrested, more and more account holders will continue to be dragged onto the net of AEPS by default," the letter said.

The organisation has demanded that the linking of Aadhaar cards with bank accounts of customers be stopped immediately. Instead of using an Aadhaar card for updating KYC, a voter ID card, electric bill, or landline bill should be used. The Reserve Bank has to seriously look into these issues to protect the hard-earned income of the common man. Apart from this, special surveillance should be carried out on ration shops, shops selling mobile SIMs, and the biometric system of office entry, which could prevent fraud cases, it said.