RBI clears confusion

New Delhi: The Reserve Bank of India (RBI) on Saturday came out with a clarification that the linking of Aadhaar numbers with bank accounts was mandatory in cases under the prevention of money-laundering rules.

The central bank's move followed reports that quoted a Right to Information Act (RTI) reply given by it that "so far it has not issued any instruction on linking the 12-digit biometric number with bank accounts by December 31."

Setting the record straight, an RBI release said: "The Reserve Bank clarifies that, in applicable cases, linkage of Aadhaar number to a bank account is mandatory under the Prevention of Money-laundering (Maintenance of Records) Second Amendment Rules, 2017, published in the Official Gazette on June 1, 2017."

These rules have statutory force and, as such, banks have to implement them without waiting for further instructions.

The government has made it mandatory to link bank accounts with Aadhaar before the deadline of December 31. Hence, bank accounts not linked to Aadhaar will cease to become operational. In its fight against tax evasion, the government said it has made it mandatory to quote the Aadhaar number for opening bank accounts.

It had also made Aadhaar compulsory for 135 schemes (of 35 ministries), including free cooking gas (LPG) to poor women, kerosene and fertiliser subsidy, targeted public distribution system (PDS) and MGNREGA. However, the Supreme Court restricted the use of Aadhaar to six schemes, where the government provides benefits or subsidy to individuals.

The RTI query before the RBI was filed by news website moneylife.in. The RTI query also asked if the central bank had the Supreme Court's permission for mandatory linking of bank accounts with Aadhaar. The RBI, in its reply, said it has not filed any petition before the Supreme Court, which has said Aadhaar is not illegal and privacy is not absolute.

The RBI reply led to reports that made out that the government and the RBI were not the same page. While banks have been threatening their account holders to furnish UIDAI-issued Aadhaar to experience seamless banking experience or face suspension of their accounts, the RBI has made it clear that it has not issued instructions regarding mandatory linking of the two.

Saturday's clarification by the RBI was to stop confusion by news items, bank officials said. The RTI query had asked the RBI to provide a copy issued by it for mandatory linking of Aadhaar number of their customers with their bank account.