Aadhaar must for bank accounts, transactions over Rs 50,000

The notification, amending the Prevention of Money-laundering (Maintenance of Records) Rules, 2005, mandates the quoting of Aadhaar along with PAN or Form 60 by individuals, companies and partnership firms for all financial transactions of Rs 50,000 or above.

By: ENS Economic Bureau | New Delhi | Updated: June 17, 2017 3:50 am
aadhaar, aadhaar mandatory, aadhaar compulsory, supreme court, bank account aadhaar, what is aadhaar number, indian express news, india news, business news Government has made it mandatory for financial transactions of Rs 50,000 and above.

The GOVERNMENT has made it mandatory to provide Aadhaar numbers while opening bank accounts and carrying out financial transactions of Rs 50,000 or more, according to a notification by the revenue department. Even existing bank account holders will have to furnish Aadhaar numbers issued by the Unique Identification Authority of India (UIDAI) by December 31, failing which the account will cease to be operational, said the notification dated June 1.

“Provided that in case client already having an account based relationship with reporting entities prior to date of this notification fails to submit the Aadhaar number and Permanent Account Number by 31st December, 2017, the said account shall cease to be operational till the time the Aadhaar number and Permanent Account Number is submitted by the client,” the notification said.

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The notification, amending the Prevention of Money-laundering (Maintenance of Records) Rules, 2005, mandates the quoting of Aadhaar along with PAN or Form 60 by individuals, companies and partnership firms for all financial transactions of Rs 50,000 or above.

However, it said that if an “Aadhaar number has not been assigned to a client, the client shall furnish proof of application of enrolment for Aadhaar and in case the Permanent Account Number is not submitted, one certified copy of an ‘officially valid document’ shall be submitted.”

The rules further mandate that in case an individual does not submit the Aadhaar number or the PAN at the time of commencement of an account, he/she will be required to submit the same within a period of six months from the date of opening the account.

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The government has also tightened the rules for small accounts that can have a maximum deposit of Rs 50,000. While such accounts could earlier be opened without having officially valid KYC documents, the amendment states that such accounts can only be opened at branches which have core banking solutions or where it is possible to manually monitor and ensure that foreign remittances are not credited and limits on monthly and annual transactions and balance are not breached.

It further said that such small accounts shall remain operational initially for a period of 12 months and thereafter for another year if the account holder provides evidence that he or she has applied for officially valid identification documents.

“The small account shall be monitored and when there is a suspicion of money laundering or financing of terrorism or other high risk scenarios, the identity of claim shall be established through the production of official valid documents,” it said. The notification comes after the government in Budget 2017 mandated seeding of Aadhaar numbers with Permanent Account Numbers to avoid individuals using multiple PAN to evade taxes.

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