The government has made quoting of biometric identity number Aadhaar mandatory for opening of bank accounts as well as for any financial transaction of Rs 50,000 and above.
Existing bank account holders have been asked to furnish the Aadhaar number issued by the Unique Identification Authority of India (UIDAI) by December 31, 2017, failing which the account will cease to be operational, according to a revenue department notification.
#BREAKING Aadhaar now mandatory for opening bank accounts, transactions of Rs 50,000 and abovehttps://t.co/lcEADzvLVG— IndiaTodayTech (@IndiaTodayTech) June 16, 2017
The government in Budget 2017 has already mandated seeding of Aadhaar number with Permanent Account Number to avoid individuals using multiple PANs to evade taxes.
Tightening the rules for small accounts, which can be opened without having officially valid KYC documents, the amendment said such accounts – which can have maximum deposit of Rs 50,000, can be opened only at bank branches which have core banking solution.
It can also be opened at a branch where it is possible to manually monitor and ensure that foreign remittance are not credited to such account and stipulated limits on monthly and annual aggregate of transactions and balance are not breached, the amended PMLA rules said.
Such small account shall remain operational initially for a period of 12 months and thereafter for a similar period if the account holder provides evidence that he or she has applied for officially valid identification documents.
The amendment makes it mandatory for individuals, companies and partnership firms to quote Aadhaar along with PAN or Form 60 for all financial transactions of Rs 50,000 or above with effect from June 1.
Post June 1 if a person does not have an Aadhaar number at the time of opening of account, then he has to furnish proof of application of enrolment for Aadhaar and submit the Aadhaar number to the bank within six months of opening of the bank account.
“In case the client, eligible to be enrolled for Aadhaar and obtain a PAN… Does not submit the Aadhaar number or the PAN at the time of commencement of an account based relationship with a reporting entity, the client shall submit the same within a period of 6 months from the date of the commencement of the account based relationship”, the notification said.
So far, as per the PMLA Rules it is mandatory to provide PAN number or Form 60 to banks while opening of accounts or for high value transactions.
For companies opening bank accounts, Aadhaar number of managers, or employees holding an attorney to transact on the company’s behalf will have to be provided.
Commenting on the development, Nangia & Co Managing Partner Rakesh Nangia said: “With the amendment, obtaining Aadhaar and PAN have gained paramount importance, since the banks are now required to report Aadhaar and PAN in respect of each of its clients’ at the time of account opening and in case of existing accounts at the time of making transactions worth Rs 50,000 or more”.