Bank Aadhaar linking: RBI never issued any order, reveals RTI
Even as banks are on an overdrive to push customers to link their Aadhaar numbers to bank accounts on the threat of suspending accounts, the Reserve Bank of India (RBI) has told us that it has never issued any such directions. This was in response to a Right to Information (RTI) Act application filed by me. The RBI’s emphatic RTI response makes it clear that the decision is entirely that of the central government. 
 
The RBI’s response says, "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 Reserve Bank has not yet issued instruction in this regard".
 
Responding to a specific query on providing copy of the file along with file notings regarding mandatory linking of Aadhaar number with bank accounts, the Reserve Bank stated it "has not issued any instruction so far regarding mandatory liking of Aadhaar number with bank accounts."
 
When explicitly asked if RBI had taken permission from the Supreme Court for mandatory linking of bank accounts with Aadhaar number, especially when the apex court had restricted its usage for six schemes, the Reserve Bank stated that is has not filed any petition before the SC."
 
 
Replies from RBI clearly show that it is the Narendra Modi-led National Democratic Alliance (NDA) government, which is frightening and coercing people into linking bank accounts with Aadhaar, under the pretext of preventing money laundering. This reasoning is quite bizarre because it seems to treat every bank customer as money launderer and criminal involved in money laundering, unless they link their Aadhaar number with bank account. 
 
Experts have questioned the legal validity of this action and even moved the Supreme Court alleging contempt of its orders. The SC has restricted usage of Aadhaar to six schemes, where the government is providing some benefits or subsidy to individuals.
   
The Gazette Notification (GSR 538(E)) is also in contravention with the orders passed by five-judge Bench of the Supreme Court as well as Aadhaar Act 2016. In its order on 15 October 2015, the apex court had said: 
 
“After hearing the learned Attorney General for India and other learned senior counsels, we are of the view that in paragraph 3 of the Order dated 11 August 2015, if we add, apart from the other two Schemes, namely, PDS Scheme and the LPG Distribution Scheme, the Schemes like the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), National Social Assistance Programme (Old Age Pensions, Widow Pensions, Disability Pensions) Prime Minister's Jan Dhan Yojana (PMJDY) and Employees' Provident Fund Organisation (EPFO) for the present, it would not dilute earlier order passed by this Court. Therefore, we now include the aforesaid Schemes apart from the other two Schemes that this Court has permitted in its earlier order dated 11 August 2015. We impress upon the Union of India that it shall strictly follow all the earlier orders passed by this Court commencing from 23 September 2013. We will also make it clear that the Aadhaar card Scheme is purely voluntary and it cannot be made mandatory till the matter is finally decided by this Court one way or the other.”
 
Earlier, the RBI itself had raised serious concerns on Aadhaar in terms of terror financing and money laundering before reluctantly agreeing to the use of the UID in 2011. 
 
The Gazette Notification issued by Department of Revenue under the Ministry of Finance, for mandatory linking of bank accounts and Aadhaar number is in contravention of the Aadhaar Act. Especially, Section 7 of the Aadhaar Act states furnishing of Aadhaar to establish identity for receipt of subsidy, benefit or service for which expenditure is incurred from Consolidated Fund of India. 
 
An individual bank customer, in most cases, uses own money to open or operate the account and not from the Consolidated Fund of India. Also there are a large number of taxpayers, who are not even eligible to receive any subsidy or benefits from any Central Ministry or State Government. Yet, they too are forced to link their self-financed bank account with Aadhaar number. 
 
One circular (No 23111/Gen/2017/Legal-UIDAI dated 15 September 2016) issued by Ajay Bhushan Pandey, Chief Executive of UIDAI about Section 7 says the Central Ministries or State Governments, who wants to use Aadhaar should issue a notification stating the service, benefits or subsidies from the Consolidated Fund of India, which require the beneficiary’s Aadhaar authentication or furnishing proof of Aadhaar. (See image below).   
 
 
Linking a bank account with an Aadhaar number has no advantage either to the bank or the customer. This is because the customer’s PAN number, which has been issued by the Income Tax Department, is already linked to majority bank accounts. The PAN number actually provides much more information than the Aadhaar number and is linked with all financial instruments of the banks’ customers.  
 
In addition, banks are mandated to strictly follow know-your-customer (KYC) procedure for all its customers. For KYC, the RBI considers passport, driving licence, PAN card, Voter's ID card issued by the Election Commission of India, job card issued by NREGA duly signed by an officer of the State Government, and letter issued by the Unique Identification Authority of India (UIDAI) containing details of name, address and Aadhaar number as six officially valid documents (OVDs). Explaining the OVDs, RBI says, customers, at their option, can submit one of the six OVDs for proof of identity and proof of address. 
 
What is more serious in this mandatory linkage business is the Government thinking and treatment to every bank customer as money launderer without Aadhaar. That too when the Government machinery has several tools at their disposable to identify any bank account that is used for money laundering purpose. 
 
One such tool used by the Income Tax Department is procuring statement of financial transaction or reportable account (FTRA), previously called as Annual Information Return (AIR). Under FTRA, banks had to furnish information on cash deposits or cash withdrawals (including through bearer's cheque) aggregating to Rs50,000 or more in a financial year, in or from one or more current account of a person. Additionally, post offices, NBFCs, companies, mutual funds, registrars or sub-registrars, Regional Transport Officers (RTOs), District Collectors and stock exchanges also have to submit high value transactions to the I-T Department. 
 
If the government has all tools and capability to identity money laundering taking place in bank accounts, why then it is forcing each and every account holder to link Aadhaar, which is illegal as it contravenes the Supreme Court orders. 
 
One Dr Kalyani Menon Sen had already filed a petition in the Supreme Court against mandatory linking of Aadhaar with bank accounts and mobile numbers, says a report from The Hindu
 
The petition challenges Rule 2(b) of the Prevention of Money-laundering (Maintenance of Records) Second Amendment Rules, 2017 for mandatory submission of Aadhaar number for individual clients, companies, partnership firms and trusts for opening of bank accounts, maintaining existing bank accounts, making financial transactions of and above Rs50,000 and crediting foreign remittance into ‘small accounts’.
 
The petition says the Government’s move to link bank accounts and mobile numbers with Aadhaar number violates fundamental Right to Privacy and equates citizens, including the elderly, women and students, with money launders. 
 
The apex court is scheduled to hear several linked cases on Aadhaar in November. Hope it considers this forceful linking of bank account with Aadhaar number as well. 
 
 
Comments
Ganesh Kumar
4 years ago
What this boils down to is primarily fear of losing monies from our bank accounts! The authorities concerned in pushing linkage state that its completely safe and secure. If that's so, will they reimburse the monies lost due to this linkage? We require guarantees per rule of law, not just 'words' of assurance. Even Banks and Telecom Service Providers should be made lawfully accountable to immediately reimburse/replenish the monies lost of every affected citizen.
santosh kumar
4 years ago
What the hell, is there a government in this country, I have never seen this banana behavior regarding such important decisions. Why government is hiding behind other agencies and spoiling their credibility. This is government responsibility to clear the air. If it has to face Supreme Court on different legal obligations then it should they should not firing solvo using other agencies shoulders.
Mogan Vasu
4 years ago
Excellent decision, why are bank officers union protesting against this directive? With a lame excuse about SC Privacy verdict. Now we know who was behind large scale illegal conversion of old demonetized notes with new ones on fake banami and shell accounts. Bank officers who oppose this move should be dismissed or should be considered accomplice to tax evaders and money launderers with heavy punishment and dismissal.
Adarsh Shetty
4 years ago
Yogesh Sir, let me congratulate you and Moneylife for this continuous effort taken from your end. I have been following the UIDAI story and also have viewed the talks on UIDAI conducted by Moneylife. I have not applied for a UIDAI number and its all thanks to your and Moneylife's activism that i have been able to keep myself informed on the ill effects and the mis-management of UIDAI numbers. Thanks again for the RTI to RBI and the update on the same.
Mahesh S Bhatt
4 years ago
We are going USA ways PMO / Ministries of Finance/Telecom are spreading terror & harrasing commoners by not upgrading telecom/banking services.Congrats Moneylife good work grateful for your inofmation Mahesh Bhatt
S
4 years ago
This lawyer FM financial policies are against the interest of common man and Tuglak policies.
KrishnaS
4 years ago
When the victims are of US citizens, no one is bothered but when the victim are you or me then the real pinch and pain starts.
KrishnaS
4 years ago
CONSEQUENCE OF LINKING AADHAAR WITH ANY FINANCIAL DOCUMENTS -- IMPORTANT
Let us learn from other countries that the Govt. and the public are paying heavily for creating and giving their
Social Security Number (SSN) to welfare schemes
and financial data bases.Identity Theft is a crime created using theft of personal information such as Name, Date of birth,Mobile No. etc. Here are some videos of victims of identity theft from their Social Security No. Just see the below stated videos carefully one by one and see the fate of these victims.
Just go to youtube and type
'SSN IDENTITY THEFT VICTIMS'
sohan modak
4 years ago
Yes Aiyerjee and don't forget Narayana Murthy, the father of Aadhaar and the Grand faiseur of Nilekani.
SuchindranathAiyerS
4 years ago
Aadhar is a Nilekani-Khangress-Modi-Jaitley-Prasad fascism contravening Supreme Court and Laws and unsupported by the RBI:
sohan modak
4 years ago
This is what HDFC has been mailing to its account holders:
Jose Vincent Unsubscribe

4:22 AM (4 hours ago)

to me
Click here to know more..........................................................................................
Images not downloading? click here for best view
HDFC Bank
ALERT! As per Govt. of India directive, link Aadhaar to all your bank accounts.

Dear Sohan Prabhakar Modak,
As per Government of India Gazette No. 13012/79/2017/Legal-UIDAI (No. 4 of 2017), it is mandatory to link your Aadhaar card to all your bank accounts.
Please ensure you do it at the earliest so that your account remains active.
Here are two simple ways to do it:
Send SMS:
Simply send an SMS from your registered mobile number to 5676712.
Send- AR space space space
Use ATM:
On completion of transaction:
Step-1: ATM screen prompts 'Link Aadhaar to your bank account'
Step-2: Select 'Yes' and enter your valid Aadhaar number
Please note:
1. In case if you have a Joint account or a Family account, it is mandatory to link Aadhaar of all the account holders.
2. If the account holder is a minor then it is mandatory to link Aadhar to his/her account.
For more information you can visit your nearest HDFC Bank branch
Warm regards,
HDFC Bank
Bank aapki mutthi mein... Bank at your fingertips.

Ensure that you and your family members have linked Aadhaar to your respective bank accounts to prevent accounts from being blocked. This is Govt. of India directive.

*Terms & Conditions apply
This is to inform that by clicking on hyperlink, the user shall enter a website which is not owned by HDFC Bank Limited ("HDFC Bank") but managed and owned by merchant partners.
If you are not the correct recipient of this mailer, please click here.
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MOHAN SIROYA
4 years ago
As a tax payer, I am not eligible to get any benefit of the Government sponsored scheme or subsidy, still I am asked by the banks to link my account with the AADHAAR under a threat that If I fail to link my Aadhaar no. with the bank account by 31 st Dec. 2017, my bank account will be blocked.One such culprit bank is ICICI Bank Andheri branch where I have my SB account. Since ICICI Bank is a supporter/sponsor of Moneylife mag. I fervantly hope that they will be the first to withdraw such threat to their account holders , in view of Moenylife's exposure of this unlawful pressure .
sohan modak
4 years ago
But, GOI has issued a Gazette notification which was sent to the account holders by HDFC. That makes a direct confrontation between Ministry of finance and the Supreme court of India. We need immediate advise on what to do. should we close all our accounts or simply withdraw our savings and forget?
S A Narayan
4 years ago
I was a recipient of pension from the Employees' PF of GOI, since 2008, having been enrolled sometime in 1975. At that time my name was spelt ,as we wanted with initials and a last name. Since then for most recent documents including Adhaar full name is insisted upon. When adhaar link was illegally mandated for pension scheme, since the names differed because of initials, pension has been withdrawn with no intimation or warning for the last 6 months. Only on physically visiting the EPF office did they reveal the reason. Can a pension which was being paid for the last 9 years to a retired PSU employee be just arbitrarily withheld. After all its my , my employer and a nominal GOI contribution over the years that has entitled me to the pension! Is this not administrative terrorism against hapless pensioners?
Asim
Replied to S A Narayan comment 4 years ago
Same thing happened with my father (A Retired teacher), his pension was withheld for 5 months & was not reinitiated to normal until his main regional account officer from treasury intervened after a complaint to the Department Of Education, this Government come to a level of bullying on pretext of Aadhaar being mandatory and there's no one to stop them, even Supreme Court which could have easily taken a suomoto for Aadhaar is delaying the petition hearings.
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