Urgent! Delink Your Aadhaar from Bank Account and Never Share It with Anyone
Senior bank officers have warned that there are a number of cases coming to light every day where bank customers are being duped when they share their Aadhaar number linked to their bank account. Fraudsters are also using unified payments interface (UPI) to siphon money from customers' accounts. This is because 'Pay to Aadhaar' (number) is an additional functionality in UPI and allows withdrawals through this route as well. This only underlines the need for people to urgently de-link Aadhaar number from the bank accounts—especially those who are less tech-savvy or financially literate. 
 
In fact, this warning comes from none other than D Thomas Franco, former general secretary of All India Bank Officers Confederations (AIBOC), which is the largest bank officers' union in India. Mr Franco narrates this story in a bank WhatsApp group on a new way to dupe hapless people. "On 21st December, Dr Lalmohan was asked to give his Aadhaar number from a caller posing as a manager of State Bank of India (SBI). Within a few minutes, his account was debited online for Rs5,000 and Rs20,000. He immediately called customer care and got his account blocked. However, further withdrawals took place all through UPI and the entire balance in his account, except for Rs200 vanished. He had not shared his password. The bank says there was a hold (block) on his account but these withdrawals still took place online. Aadhaar seems to be the culprit."
 
He goes on to narrate another example: “A similar call was received by another friend of mine, but he refused to share his Aadhaar number. A third friend of mine, a lady, says she received a similar call saying her credit card has expired and the caller wanted her details to reactivate her card. She refused to share any detail over phone. So, we need to alert everyone about such frauds. Also we need to immediately ask our bank to delink the Aadhaar linked with the account. Do not share your Aadhaar number, password or any banking details to anyone over phone," Mr Franco adds.
 
In March 2017, a bug in UPI cost Bank of Maharashtra about Rs25 crore. The Pune-based Bank had procured an UPI solution from a vendor (reported to be city-based InfrasoftTech), which had a bug that resulted in the fund moving out of the accounts without the sender's account having the necessary funds. (Read: UPI bug costs Bank of Maharashtra about Rs25 crore)
 
Moneylife was the first to raise this issue in September 2014. It was followed up with the prime minister’s Office (PMO) with a meeting and through filing a complaint on their portal. However, the PMO portal closed the complaint in October 2017 citing insufficient information. (Read: How Aadhaar linkage can destroy banks)
 
Lakhs of people linked their bank accounts to their Aadhaar number under threat from banks that their accounts and banking services would be frozen. This is no longer mandatory after the Supreme Court judgement on this issue. 
 
Earlier in July 2018, National Payments Corp of India (NPCI), which developed and promotes UPI and Bharat interface for money application (BHIM), had asked banks to discontinue Aadhaar-based payments through the UPI and immediate payment system (IMPS) channels. Pay to Aadhaar is an additional functionality in UPI and IMPS where the payer can transfer funds to the beneficiary using an Aadhaar number.
 
"Aadhaar number is a sensitive information and the revised framework about its usage in the payment landscape is still evolving. With this background, we proposed removal of ‘Pay to Aadhaar’ functionality in both UPI and IMPS before the steering committee (meeting held on 5 July 2018). The proposal of removing the Aadhaar number functionality was approved by the steering committee,” NPCI had said in a circular issued on 17 July 2018. 
 
Following the NPCI circular, SBI removed pay to Aadhaar functionality from its BHIM SBI Pay app citing regulatory guidelines. (Read: Aadhaar: SBI Disables ‘Pay to Aadhaar’ Functionality from Its BHIM UPI App, Others Not Bothered
 
Later in September this year, the Supreme Court declared Section 57 of the Aadhaar Act as unconstitutional. This means bank account-holders, e-wallet or mobile wallet users and mobile subscribers are no longer required to use their Aadhaar number.
 
Following the judgement, the department of telecommunication (DoT), on 26th October directed all unified license holders to discontinue use of Aadhaar eKYC for issuing new SIM and re-verification of existing subscribers before 5 November 2018.
 
"...the use of Aadhaar authentication is not permissible for eKYC for verification of telecom subscribers not for issuing new mobile connections. In compliance to the judgement of the Supreme Court, all licensees are to discontinue the use of Aadhaar eKYC service of Unique Identification Authority of India (UIDAI) both for verification as well as for issuing new mobile connections. All telecom services providers (TSPs) shall ensure its implementation across the country in a time bound manner and compliance in this regard be submitted by 5 November 2018," the telecom department said in the circular. 
 
Post the judgement from the apex court, All India Bank Employees Association (AIBEA), demanded that banks should stop issuing Aadhaar numbers as it was not a banking activity. In a statement in September 2018, AIBEA's general secretary CH Venkatachalam had said, "The compulsory linking has resulted in lots of frauds by third party agents who canvas for loans. There are instances where with the same Aadhaar card number several loan accounts were created by the loan processing agents of banks to meet their targets." 
 
He said designated bank branches were issuing Aadhaar, which should be stopped as it was in no way connected to banking activity.
 
In fact, before the Supreme Court judgement, bankers were found to be given targets by UIDAI for Aadhaar enrolment. Banks had been given a target of logging 16 enrolments daily at 10% of their branches. From 1 July 2018, this has been reduced to eight a day, a report from Press Trust of India (PTI) says quoting a circular issued by the UIDAI. It also said that banks, which achieve the fresh targets for July will not have to face 'financial disincentives' up to that month.  
 
Dr Anupam Saraph, one of the petitioners in the Aadhaar case in the Supreme Court, and an expert in sustainable systems design, also found the target setting by UIDAI as funny if not devastating. "Who are they enrolling if 121 crore have been enrolled? They do not trust the bank account that were opened during the past over 70 years, but now want the same bankers to generate new data and benami accounts in the process?... (The) drive for enrolment is sufficient to expose that either the 121 crore person's enrolled number is suspect or the data of those 'enrolled' is suspect. All evidence suggests the most likely answer is both of the above," he had said. 
 
Banking regulator, Reserve Bank of India (RBI) has, however, had kept mum, even when UIDAI was encroaching upon its regulatory authority. 
 
Last year, Moneylife published an article exposing that the forceful linking of Aadhaar with bank account was taking place due to a Gazette Notification issued by the finance ministry and RBI has no role in this. Our article was based on the reply we got from the RBI under the Right to Information (RTI) Act. 
 
After the story was published, RBI came out with a 'clarification' over the weekend that banks should follow the (Prevention of Money Laundering Act or PMLA) Rules, which have statutory force. Whether it is linking of Aadhaar with bank account or mobile numbers, the strange part is how the Central government is issuing direct orders by side lining sectoral regulator under one pretext or the other. The government is also ignoring orders issued by the Supreme Court to restrict use of Aadhaar that too purely on a voluntary basis. (Read: Bank Aadhaar linking: RBI never issued any order, reveals RTI
 
While RBI was quick to fall in line with the finance ministry in issuing master directions for Aadhaar, post the SC order, it has not issued any notification in this regards or asked banks to de-link Aadhaar number of account holders. 
 
Earlier on 20 April 2018, while issuing master direction on know-your-customer (KYC) norms, the central bank had clearly stated, "The revised Master Direction is in accordance with the changes carried out in the PML Rules vide Gazette Notification GSR 538 (E) dated 1 June 2017 and thereafter and is subject to the final judgment of the Hon’ble Supreme Court in the case of Justice KS Puttaswamy (Retd.) & Anr. V. Union of India, W.P. (Civil) 494/2012 etc. (Aadhaar cases)."
 
Despite the Supreme Court ruling linking of Aadhaar with bank accounts or mobile number as invalid, the banking regulator has yet to issue a notification for this. It is time for bank account-holders to de-link Aadhaar number, if linked, from their accounts and also not to share the number and any details related with their bank account with anyone, especially over phone or email.
 
You may also want to read…
 
 
 
 
 
 
 
 
 
 
 
 
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COMMENTS

Suresh Deshmukh

3 months ago

Another disgusting attempt in Moneylife to vilify Aadhaar system!

Gurudutt Mundkur

3 months ago

I am all for the delinking of AADHAAR number from Bank accounts. I have done so.
Having said that, I ask:
WERE THERE NO ILLEGAL / UNAUTHORISED BANK TRANSFERS BEFORE THE AADHAAR era?
Every bank should send an OTP for every transfer over Rs5K.

tpsamant

3 months ago

If Aadhar can be misused, why all banks should not de-link it in order to stop misuse/fraud.
Now customer should take care not to disclose Aadhar to anybody on telephone or even for filling any form.etc.

paseb

3 months ago

Paytm respects the Aadhaar verdict of The Hon'ble Supreme Court of India. Review of the judgement and its implications on our users may take some time. We have noted your query, we will update you on the process to De-link Aadhaar from your wallet/account. We truly appreciate your patience in this regard

REPLY

paseb

In Reply to paseb 3 months ago

This is the reply I got from Paytm when asked to delink my Aadhaar. What to do next?

Nagaraj Shankar

3 months ago

This article is highly misleading. First of all, UPI is a payment interface and NOT a money receiving interface, in the sense that If you are the person opening the app on mobile you can only TRANSFER money to someone else and IN NO WAY INITIATE A TRANSFER OF MONEY FROM SOMEONE ELSE'S ACCOUNT TO YOUR ACCOUNT, UNLESS THIS IS AUTHORIZED BY THE OTHER PARTY!!!
Hence I request the affected person TO EXPLAIN IN DETAIL AS TO HOW THE FRAUD OCCURRED.

Harish

3 months ago

hilarious, and feel pity for the union or association

Milind Purandare

3 months ago

This is clearly a misleading article. UPI limits transaction to 20k per day. Also irrespective of Aadhar phone frauds take place. In fact for upi you will have to authenticate through own mobile. Else the transaction will not happen. Unlike credit card where one may if password / pin is known.

REPLY

ashish chauhan

In Reply to Milind Purandare 3 months ago

May be for you 20k is not much but if so. Eone have only this much in account and that also gone... Then... This is not for illeterate even letterate a accountant of an mnc has lost 60000 in just 1 hour due to linking of mobile and bank account to adhar..... What happen with the other people... When you experience then you understand
...

Atul Kumar

In Reply to Milind Purandare 3 months ago

The transfer limit on UPI is 50 k. It was reduced from 100k to 50k recently.

https://upipayments.co.in/upi-transaction-limit-of-paytm-sbi-tez-and-phonepe/

Daksh Bajaj

3 months ago

Entire article keep saying this happened that happened because of Aadhar, but nonwhere it is mentioned exqctly how. This is similar to ATM card, credit card, debit card fraud. In fact recently Aadhar chief disclosed his aadhar but nobody could prove that it's harmful. It's like giving your bank account number. Merely giving your account number or in this case aadhar don't lead to fraud. There are additional information required in my understanding. These are completely misunderstood and misinforming article.

REPLY

ashish chauhan

In Reply to Daksh Bajaj 3 months ago

When someone follows you that was not through only Adhar no. But he will follow other details too.. These froud happened earlier also but now it become easier with adhar as all details phone no., account no. And other details handy due to adhar linking...

Ach Man

3 months ago

Why is he focussed on Aadhar fraud, which would be much much less than credit card frauds and online frauds of debit cards.

As a rule these frauds should be eliminated and then resolve the aadhar issues.

Aadhar is much convenient for documentation purposes. Yes there may be loop holes but the card frauds are very significant.

Can these people discuss to step these. No they won't. Becos it's business. The Aadhar is govt.

REPLY

Sajal Manjhi

In Reply to Ach Man 3 months ago

You are right. Many people ignore this so it is dangerous https://www.techotn.com

Prathiba Sundaram

3 months ago

Arun Jaitley should compensate the loses occurred. We suspect, Modi government is trying to loot the Indians. Arrest those who compelled the account holders to link with Aadhaar.

REPLY

Top Shot

In Reply to Prathiba Sundaram 3 months ago

Please do not make wild and misleading accusations. The best option is to speak with your relationship manager and get clarifications

Anand Vaidya

3 months ago

From the examples cited in the article, I can't understand how linking SB A.C with Aadhaar will endanger our balances. The examples are exploiting loopholes in the existing banking practices, not Aadhaar.

It is very unfortunate that (so-called) literate people are against aadhaar which can become an effective anti-malpractices and ease of consumer features. If there are (and yes, there are) implementation problems, they can and should be fixed. Don't throw out the baby with the bathwater.

I have used something similar abroad and can vouch for the real simplification of matters one unified ID can provide.

In India, too many vested interests are against any progress. They would rather prefer ordinary Indians run from pillar to post with bunch of papers in corrupt govt offices like we did in the sixties and seventies.

It is sad to see MoneyLife support such mindless opposition

REPLY

Vickram Crishna

In Reply to Anand Vaidya 3 months ago

It appears a more careful reading is needed by people who have not understood how some attempts to create digital convenience are actually unnecessarily dangerous, being a workaround from prudent banking practices. While the 'manual' method of account blocking provided relief from the frauds, nothing could be done about the UPI withdrawals, which quite evidently constitute pre-authorisation.

Anand Vaidya

In Reply to Vickram Crishna 3 months ago

Americans have crossed Solar system and are looking at setting up colony on Mars. Even ISRO has a Mangalyaan circling Mars. It is a joke to reject progress in computing applied to everyday life and insist paperwork is the 'right solution'. No. Scams are easier with paper based workflow.

Computers bind people to follow workflows. A well meaning gov and management (RBI+Banks) can pro-actively fix problems in existing processes and provide far superior experience.

Do you still depend on faxes and letters for communication or have adopted email, SMS, WA etc?

Sandeep Ahlawat

3 months ago

Where ur account gets empty even by cloning the mob. no. attached to the account, then why cann't aadhar base fraud happen? Are we expecting from these corrupt banks (who looted 6000 crores (sbi) from poors in last one year for just non mainting minimum balance) that they will take care of our money?

Prashant Naikwade

3 months ago

Now money life has gone to extremes in their hatred towards aadhar.
Anyone can see the pomposity of this article.

Thakur Saheb

3 months ago

How much time these anti aadhar brigade spend to spread fake news. They must be paid well by the lobby trying to destabalise the government. I wish this writer used his talent for some constructive work to build the nation.

REPLY

Beeran Koya

In Reply to Thakur Saheb 3 months ago

Do not utter sheer nonsense. If you eulogize this senseless wreckless govt. you can. But do not keep yourself blind over their poisonous protests against Adhaar card, while the UPA govt wanted to implement.

Since these fraudster and criminal teams are more dangerous for the country and its people, as they are one who helped all these bank robbers to escape from the country.

As you said, "why can't these people do something to improve the employment situation of the country, rather than helping the looters to loot and escape from the country,

Francis Xavier R

In Reply to Thakur Saheb 3 months ago

before 10 yrs, there was no Aadhar.. so you mean to say, before this decade all the governments were destablised due to non existense of Aadhar... pls write yr comments with facts and logic ...

sandeep nagesh

In Reply to Francis Xavier R 3 months ago

Mr Francis.. before 10 years there were no smart phone, why do you need one today?

Manoj Parmar Parmar

3 months ago


Banks Recover Rs10,000 Crore from Customers Not Maintaining Minimum Balance, Using ATMs More
Public sector banks (PSBs) have collected more than Rs10,000 crore over the past three years from customers as penalty for not maintaining minimum balance in saving bank account and as charges for additional transactions on automated teller machines (ATMs) beyond the permitted free transactions. This information was given in the Lok Sabha by Shiv Pratap Shukla, minister of state for finance.
 
Since this money recovered goes directly in to bank's net profit, bankers are reluctant to pay any heed to customer's woes on these charges. 
 
As expected State Bank of India (SBI) tops the list of fines collected from its account holders. During FY2017-18, the state-run lender has collected Rs2,433.84 crore from customers for non-maintenance of monthly average balance in their accounts. During the current fiscal, till September 2018, SBI has recovered Rs459.88 crore from account holders.
 
The information given by the minister shows that 21 PSBs have collected Rs1,000 crore in the first six months of 2018-19 as charges for not maintaining minimum balance in saving accounts.
 
The minister told the Lok Sabha that as per Reserve Bank of India (RBI), as on March 2017, there were 150.21 crore savings account opened in scheduled commercial banks, out of which 53.30 crore were basic saving bank deposit accounts (BSBDA) and Jan-Dhan accounts. In short, the banks would have recovered penalty from nearly 97 crore account holders.
 
Similarly, these banks recovered more than Rs850 crore from customers for using ATMs more than the permissible number of times.
 
Mr Shukla, however does not feel that there is anything wrong in this. He says, "As appraised by PSBs, no savings account has been closed by banks for non-maintenance of minimum balance.”
 
Banks are permitted by the Reserve Bank to fix reasonable penal charges on non-maintenance of minimum balance as per their board approved policy, the minister said.
 
Earlier this year, stung by persistent criticisms customers and consumer organisations for levying exorbitant and unfair charges on people with modest means for failing to maintain minimum balance, SBI had reduced charges for non-maintenance of monthly average balance (MAB) in savings accounts. However, in an era of no-frills and Jan Dhan accounts, a mere reduction in charges is not the solution. All banks need to scrap these charges and change the nature of the account. 
 
Moneylife Foundation has led a group of non-governmental organisations, economists, bank unions and activists, in raising voice against this practice of arbitrary charges. Our joint memorandum submitted to regulators, Finance Ministry and Parliamentary Standing Committee on Finance had come up with a simple solution: instead of levying charges for not maintaining minimum balance, bank should downgrade the customer's account to lower levels, like no-frills account. 
 
"In the era of Jan Dhan account and zero balance accounts, the average minimum balance is an anachronism. Banks cannot be allowed to debit customer accounts under any circumstances. Banks are merely custodians of the money deposited with them. If a customer’s balance is low, then the bank can downgrade the account to a Zero Balance or No-Frills Account (and reduce services like chequebook facilities etc.). It cannot levy a charge. This is in line with international practices," the Memorandum submitted by us says.
 
Before April 2017, there were no charges levied on non-maintenance of minimum monthly average balance. SBI re-introduced the requirement last year and thus charges on savings bank account after a gap of six years.

 

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Not Loan Waiver, but Simple Solutions Can Solve Rural woes: SBI
Assembly elections are scheduled in eight states next year. Considering the competitive populism policy followed across some states, more and more states may now decide to go for a farm debt waiver scheme. However, research shows that loan waiver never become a solution to farmer distress, says a report.
 
In the research report, State Bank of India (SBI), says, "... benefits of loan waiver do not reach to the targeted person due to various reasons like lack of formal credit, and identification of beneficiaries. Past experience suggests that States like Tamil Nadu, Maharashtra, Karnataka, Uttar Pradesh, Jammu & Kashmir (J&K), Punjab, Chhattisgarh, Andhra Pradesh, and Telangana who have in the recent past announced their own farm loan or debt waiver schemes are not successful in implementing it properly."
 
Instead of loan waiver, there is a need to align non-performing asset (NPA) classification norm for agri cash credit loan exactly at par with other segments, SBI says, "If we align the NPA classification norms for kisan credit card (KCC) and crop loans at par with other segments, we would be thus able to save the aforesaid amount from being classified as NPAs. It would not only help the farmers but would also help the banks in saving capital on account of provisions made towards these otherwise avoidable NPAs."
 
As per the latest data from Reserve Bank of India (RBI) the agriculture NPA was Rs60,200 crore as at March 2017. Applying a threshold figure, NPAs on the industry level due to KCC and crop loan would be around Rs27,700 crore for March 2017. "If we assume that the March 2017 figure of Rs60,200 crore would have moved up to Rs80,000 crore as per trends, the NPA ratio of KCC and crop loan would be Rs36,800 crore."
 
"It would be in the benefit of the bankers as well as the farmers, if the farmer is given renewal or enhancement based on deposit of applicable interest to the bank and the submission of periodic stock statements, which may be linked to the yearly crop cycles, especially when the bank is satisfied with the farmer in terms of his/her land holding or paying capacity," SBI says.
 
As per the existing norms of asset classification for agriculture advances, in case of an agriculture cash credit account a farmer has to repay the entire outstanding (principal along with interest) to seek fresh loans from the banks unlike other segments of cash credit business where if the borrower has cleared interest payments, he/she would be eligible for enhancement/ renewal. 
 
This makes the farmers woes aggravated. Say for a loan of Rs1 lakh, unless the farmer repays the bank this amount along with the applicable interest, he/she would not be able to either roll-over or become eligible for fresh loan or enhancement. 
 
"For a marginal farmer, it becomes difficult to lock his entire crop sales proceeds with the bank (till the loan is processed) to become eligible for fresh loan. It may also be noted that a typical cash credit account for any business apart from agriculture, requires only the interest to be serviced and the periodic submission of stock statements to remain as a performing cash credit account," the report from SBI says.
 
The income from the agriculture depends upon the harvest of the crop. The marginal and small farmers do not have any other source of income other than the produce, which is sold in the market to pay for their loan dues and to meet their subsistence expenses.
 
Talking about loan waiver, SBI says, the eight states, who are likely to go for it have only two options to fund the scheme, borrow from the market or reduce capital expenditure. "We believe, given the lack of limited fiscal space available to states in terms of market borrowings as per the 14th Finance Commission recommendations, states have to cut back significantly on capital expenditure, even after incrementally borrowing from the market. Our estimate shows that states like Madhya Pradesh, Rajasthan, Assam, Chhattisgarh and Karnataka will have to cumulatively cut Rs78,453 crore in capital expenditures, if incremental revenue measures are not announced," the report says.
 
The problem, according to SBI is that since such cut in capital expenditure cannot happen in a single year, it will be spread over a period of time and hence settlement will also be delayed. It says, "This will only imply stuttering of credit flow as the relevant account will not be eligible for new loans. This will also imply farmers accessing informal sector for loans and hence higher indebtedness and may be another round of loan waivers."
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COMMENTS

Asha R

3 months ago

Delink of aadhar is the best suggestion.. or need not to link the aadhar with bank is very helpful to the village people.. because they dont know what to do... it take one full day to... do any simple thing in the bank

N Bala Krishna Rao

3 months ago

It is a good suggestion, to give new loans if interest is paid . of course as per eligibility of the farmer.

Parimal Shah

3 months ago

Loan waiver is a bribe given by a selfish political leader to grab power at the expense of the state finances.
The amount so waived should be counted as election campaign expense and MUST be paid for by the party or the person who promised the loan waiver.
We the tax payers are already footing unnecessary expense of the lavish lifestyle of the so called leaders. They (and their goons too) fly around in Air India (do not pay or pay minimal, that to not from their pocket).
Most of them do not do their home work.
They disrupt working of the sessions that are few anyway to start with.
They pocket all the allowances, do not pay electricity or phone bills (after exceeding the free quota).
They are more interested in personal uplift rather than of the country.
They occupy residence illegally even when not elected and promise the moon at the time of election. The gullible get carried away and vote those cheaters to be the leader.
Again to be fooled for next few years.
If we do not understand this, we deserve such leaders.
The cost is to remain a poor and developing country in perpetuity.
That is the way the rules are framed by the selfish leader who was interested in a dynastic rule by one family.
The law is interpreted to suit the need of such leaders and only in letter (that too as and when it suits them).
The spirit of the law is intentionally murdered many times over. (Reservation was to be for 10 years, now it looks like it is for perpetuity or annihilation).
Mera Bhaarat Mahan. Really!?
May be in terms of the folly of the people India in whom we elect.

Meenal Mamdani

3 months ago

An excellent suggestion from SBI. Bankers will redeem their dismal reputation if they come up with such constructive and novel ways to tackle this perennial problem.

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