RBI Takes a Complete U-Turn, Says Linking Aadhaar to Bank Account is Mandatory

A day after revealing that it has not issued any direction to public sector or private banks to ask their customers to Aadhaar linked to all their accounts in order to ensure it is not frozen, the Reserve Bank of India (RBI) on Saturday said linkage of the biometric identity number with bank accounts is “mandatory”.

“The Reserve Bank clarifies that, in applicable cases, linkage of Aadhaar number to a 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.

Earlier, the RBI had said in reply to a Right to Information (RTI) Act application filed by journalist Yogesh Sapkale who is associated with Moneylife.in that the apex bank has not issued any order for mandatory Aadhaar linkage with bank accounts, making it clear that the central bank and the government are no on the same page.

The reply had further revealed that the decision is entirely that of the central government.

When asked to provide a “copy of the notification/master direction/master circular/draft notification or guidelines issued by the Reserve Bank to all banks for mandatory linking Aadhar number of customers to their accounts”, the RBI had said, “The Government has issued a Gazette Notification GSR 538(E) dated 1 June 2017 regarding Prevention of Money laundering (Maintenance of Records) Second Amendment Rules, 2017, inter-alia, making furnishing of Aadhaar (for those individuals who are eligible to be enrolled for Aadhaar) and permanent number (PAN) mandatory for opening a bank account. It may be noted that the Reserve Bank has not yet issued an instruction in this regard.”

“(The) Reserve Bank has not issued any instruction so far regarding mandatory linking of Aadhaar number with a bank account,” it had further stated.

It had also revealed that it has not even filed any petition with the Supreme Court on seeking explicit permission of linking the two. “(The) RBI has not filed any petition with the Supreme Court," the RBI said in response to the query.

In its “fight against tax evasion”, the Centre has made it mandatory to quote the Aadhaar number for opening bank accounts and also made Aadhaar compulsory for 135 schemes (of 35 ministries) including free cooking gas (LPG) to poor women, kerosene and fertiliser subsidy, targeted public distribution system (PDS) and MGNREGA.

However, the Supreme Court has restricted usage of Aadhaar to six schemes where the government provides benefits or subsidy to individuals.

Banks through e-mail and text messages are threatening their customers to get both linked in order to enjoy seamless a banking experience.

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