Mandatory to link Aadhar to bank accounts by December 31

The Union government has made Aadhaar mandatory for opening bank accounts. If the person doesn’t have the card then a document proof of Aadhaar application, showing one has applied for Aadhaar Card, should be submitted with the bank.The government move comes close on the heels of the decision last week that all income tax assessees should link their Aadhaar numbers with Permanent Account Numbers (PAN) when they file their returns, after the Supreme Court upheld the law in this regard.All existing account holders are asked to submit Aadhaar to banks by Dec 31, 2017, failing which accounts will become invalid, PTI reported.The measure had been taken for prevention of money laundering, it added. “In case the client fails to submit the Aadhaar number and Permanent Account Number within the aforesaid six months period, 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.The reproduction of the story/photograph in any form will be liable for legal action.So far, it was mandatory to provide PAN number or Form 60 to banks while opening of accounts or for high value transactions. Small accounts that do not require officially valid “Know Your Customer” documents can be opened only at bank branches that have core banking solutions.The government has also moved to watch more closely small accounts with deposits under Rs50,000. The Supreme Court is hearing several petitions against making Aadhaar mandatory to avail public services.”As per the Aadhaar Act and the orders of the Supreme Court, Aadhaar can not be made mandatory”, said Gopal Krishna of the Citizens Forum for Civil Liberties.The PMLA and rules impose an obligation on reporting entities such as banks, financial institutions and intermediaries to verify the identity of clients, maintain records and furnish information to the Financial Intelligence Unit of India (FIU-IND).As per Rule 9, every reporting entity shall at the time of commencement of an account-based relationship, identify its clients, verify their identity and obtain information on the objective and intended nature of the business relationship.In all other cases, identity should be verified while carrying out transactions of an amount equal to or exceeding Rs. 50,000, and in any worldwide money transfer operation.