Aadhaar: How banks are terrorising customers

Moneylife Digital Team 25 June 2018

Without even understanding the meaning of orders passed by the Supreme Court or reading the notification issued by Ministry of Finance, several banks are found harassing customers for want of Aadhaar. In fact, to her utter shock, Anoo Bhuyan, a journalist, found three of her bank accounts frozen without sending her any prior intimation for completing know-your-customer (KYC) norms based on Aadhaar. This is not only illegal but also contempt of the Supreme Court orders on extending deadlines for linking Aadhaar and bank accounts till it delivers final judgement the matter. Even a circular issued by Reserve Bank of India (RBI) in April 2018, clearly says linking of Aadhaar with bank accounts is subjected to final decision of the Supreme Court.

It's happened: 3 of my bank accounts been frozen, without sending me any prior information.

Now they're saying its for #Aadhaar KYC.
— Anoo Bhuyan (@AnooBhu) June 18, 2018

Explaining her ordeal on Twitter, Anoo says she had visited her bank a few weeks ago for checking her KYC status and was told that it was in order. When asked about Aadhaar, she was told that it is only for new accounts. Last week, her debit card transaction failed. Upon inquiry, she learnt that her three bank accounts were frozen for want of Aadhaar, without any prior notice.

5. I now have one bank account so far not frozen- Its an ICICI account so I don't even have any hope that it will remain unfrozen.
I have a few thousand bucks in it. Some money also locked in PayTM.

Now to scrape through next x number of days until they unfreeze.#Aadhaar
— Anoo Bhuyan (@AnooBhu) June 18, 2018

Finally, Anoo managed to get her accounts de-freezed after meeting and explaining the Bank's manager about the Supreme Court orders, government notifications. But many customers in similar situation may not find the time and courage to take on the Bank.

As in I explained to him the situation of the Aadhaar case in court, pointed out government notifications and court orders, and indicated to him that I wouldn't be accepting his ignorance/ deception.
— Anoo Bhuyan (@AnooBhu) June 22, 2018

Another customer Tarique Anwar found his account in Punjab National Bank (PNB) frozen for want of Aadhaar.

Same with me, @pnbindia freeze my a/c,
So stopped using it.
But I haven't submitted #Aadhaar .
Meanwhile my other a/c in other bank is working with #Aadhaar
— Tarique Anwar (@itariq_anwar) June 19, 2018

While replying to a query, Axis Bank also said, "Aadhaar is necessary document for banking transactions". In its interim order, the 5-judge Constitution Bench of the Supreme Court has clearly stated that Aadhaar cannot be made mandatory for anything except six schemes for which money is utilised from the Consolidated Fund of India. Banking is certainly not one the schemes.

Banks enforcing Aadhaar is, however, not limited to individual customers. Even companies are being harassed to submit Aadhaar for their directors. Sharing his experience, Ashish M, says, “Axis Bank and Kotak Bank even refused to open an additional business account of my company till the Director's Aadhaar was submitted. This was when our company already had ongoing older accounts with them. Bharat Petroleum Corp Ltd (BPCL) refused to transfer my gas connection without Aadhaar, despite me giving up my LPG subsidy long time back. Almost all colleges and schools have made Aadhaar as a mandatory document for enrolling students. Life Insurance Corp of India (LIC) does not allow login to its customer portal without Aadhaar. How many agencies will we fight specially when the govt is on their side? We have to run our business, do job and manage home as well.”

Reserve Bank, in its updated Master Direction on KYC, clearly stated that the "revised direction is subject to final judgement of the Supreme Court (in Aadhaar cases)…"

A notification issued by the Ministry of Finance on 31 March 2018 clearly says that the last date for linking Aadhaar with existing bank accounts has been extended till the final judgement of the cases in Supreme Court. Subsequently, it has extended till the final judgement, the linking of Aadhaar with permanent account number (PAN) or Form 60 by customers. Yet, several banks are either not reading the notification or ignoring directions from the apex court on Aadhaar.

Despite a clear notification from Finance Ministry, the country’s largest lender, State Bank of India (SBI) has been telling its customers that Aadhaar and PAN are mandatory as per government directives. This is nothing but a lie since all deadlines are extended by the Government following interim order from the 5-judge Constitution Bench of the Supreme Court.

Aadhaar and PAN are mandatory as per GOI directives. The list of OVDs ( Officially Valid Documents) consists of the following: passport, driving licence, Voter's Identity Card, job card issued by NREGA duly signed by an officer of the State Government, (1/4)
— State Bank of India (@TheOfficialSBI) June 15, 2018

Want to open Sukanya Samruddhi account for my 1 month old child. Bank is asking for Aadhaar card of the child. Is Aadhaar of child necessary??#Theofficialsbi
— Ankit (@Ankit86913122) June 18, 2018

Arvind, a customer of HDFC Bank says without Aadhaar the bank allows only money deposits.

I have been thru this #Aadhaar #KYC shit with HDFC Bank. Only activity they allow is money deposit. Rest everything frozen. Imagine the situation if one is travelling !
— arvind (@arvind029) June 18, 2018

Overlooking the order from the apex court and Gazette notification from Finance Ministry, several banks are forcing customers to submit Aadhaar or freezing their bank accounts without any intimation.

I faced similar issues with @HDFC_Bank and many many more institutions like this. They refuse services without #Aadhaar when the SC has clearly extended the deadline. When you point them to the ruling they say it’s a part of the company policy ðŸ˜‘
— Saurabh Mhatre (@ttwistedbrownie) June 19, 2018

This is ridiculous. Also illegal. That said, people at my bank told me quite clearly that they have been instructed to take #Aadhaar as mandatory. "Govt regulations, ma'am, regardless of the SC." (Yup, they did indeed say regardless of the SC". Chew on that for a moment). https://t.co/dcY12WnNPm
— Deepanjana (@dpanjana) June 18, 2018

As per the World Bank Global Findex Report released in April 2018, adult bank account holders in India increased to 80% in 2017 compared with 53% in 2014 and 35% in 2011. According to data released by the government, number of JanDhan account holders increased to 31.44 crore in March 2018 from 28.17 crore previous year. As on March 2017, total number of current and savings accounts in banks in India rose to 157.1 crore. However, 1.90 crore Indian adults still does not have a bank account, the data from World Bank shows.

Comments

User

vsmedi

1 year ago

My bank accounts got frozen by oriental bank of commerce in 2018, i got it unfrrozen by writing a RTI application asking about mandatatory documents for operating account in the bank.

How ever i have a written reply from the.bank stating that adhar is mandatory.

But I still got my account unfrozen.by explaining the situation of the supreme court case to bank manager.

Later on he asked me for guidance in few.other banking troubles he was facing with the customers????

Arnavaz m. Havewala

5 years ago

YUP..SBI said-"system does not accept it", when I tried to add my daughters name in my account, and told them Im not giving Aadhar card for her.
Im still running around their staff in circles-but they just wont do it.

V ganesan

5 years ago

Today i visited SBI thakurli east branch to submit change of address.My home branch is chennai the manager said it cannot be done at thakurli but it can be done only at chennai.Can i go to chennai from here to chennai and one more thing they said is gas cylinder bill not accepted as proof of address.But i argued with the manager RBI website is saying.Manager replied it is piped natural gas.In india how many places are covered by piped gas.As per my knowledge it is only three or four cities in india having piped gas .Now i dont know how to change address in my sbi bank account.

P M Ravindran

5 years ago

The banks, no doubt, are wrong. The executive who introduced this scheme, when it is widely known that similar schemes introduced in the US of A, UK and Australia had been given up on cost and privacy issues, has be worse. But what about our apex court that has been sitting on the petition(s), challenging the scheme, for so many years? And they could hold a mid night hearing on a petition challenging the discretion of the Governor of Karnataka and give a decision then and there! Even in the matter of linking adhaar to mobile numbers, the media had then reported that the apex court had directed it to be done. The clarification from the apex court came after the proverbial horse had bolted from the stable!

Sandeep Khurana

5 years ago

SC has not been unambiguous on subject either. Even Fin ministry notification quoted herein, says Aadhaar linking deadline extended indefinitely for "existing bank accts". Banks interpret this to deny opening new accts without Aadhaar.

Didnt UIDAI give targets to banks? Why?

ramchandran vishwanathan

5 years ago

The MD & CEO of the bank making such a demand must be sacked after the customer complains to the Banking Omdusman

Dr Ananthanarayanan

5 years ago

Why do the RBI and the Supreme Court remain mute spectators to this brazen violation of orders by banks.They must issue a prominent notification in all leading newspapers and other media channels.Why this reluctance.If this is the case with enlightened citizens I can very well Imagine the plight of financially illiterate customers.

V Ramesh

5 years ago

How does one explain the Supreme Court's inaction in the face such blatant violation of its orders? If a few bankers/bureaucrats are jailed, this nonsense will stop.

V ganesan

5 years ago

I am not able to submit change of address in my bank account.I am having only gas cylinder bill with my present address.Is it enough to change address in the bank

Was Jet Airways a Bankruptcy or a Fraud Enabled by Bankers and Auditors?

Why Is SBI Deducting Money for PM Jeevan Jyoti Bima without Authorisation or...

Raymond and Murugappa Cases Show Women in Corporate India Are Still Climbing...

The Modi Premium

Sahara: Ghost, Duped Investors & Regulatory Failure

Absolute Power

The Scam: Now in it's 11th Printing

Pathbreakers

Moneylife Online Magazine

Monthly Digital Access

Full Archive access

Stockletters in 5 Flavours

MAS: Complete Online Financial Advisory

Please

With

The Scam: Now in it's 11^th Printing