In yet another measure against black money generation, the government has made it mandatory to give Aadhaar number while opening a new account and also to link the existing accounts with the Aadhaar numbers of their holders. Not disclosing it by December 31 will lead to suspension of the account till it is done.
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.
If a customer, eligible to be enrolled for Aadhaar and obtain the PAN, already has a bank account, he needs to submit the Aadhaar number and PAN by December 31, according to a Revenue Department notification.
In case a customer having an account failed to submit his Aadhaar number and PAN by December 31, the account would cease to be operational till the time these numbers are submitted, it said.
The measure had been taken for prevention of money laundering, it added.
“Provided that if the customer does not submit the Permanent Account Number, he shall submit one certified copy of an ‘officially valid document’ containing details of his identity and address, one recent photograph and such other documents, including in respect of the nature of business and financial status of the client as may be required by the reporting entity,” it said.
The Union Budget 2016-17 had mandated seeding of Aadhaar number with PAN to negate the possibility of individuals evading tax using multiple PANs.
The notification — issued by amending the Prevention of Money-laundering (Maintenance of Records) Rules, 2005 — tightened the rules also for small accounts, which can have a maximum deposit of Rs 50,000 and can be opened without having officially valid KYC (Know Your Customer) documents.
According to the notification, such accounts can be opened only at bank branches with core banking solution.
Such accounts can also be opened at branches where it is possible to manually monitor and ensure that foreign remittance is not credited to such accounts and stipulated limits on the monthly and annual aggregate of transactions and balance are not breached.
Such small accounts will remain operational initially for 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 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 the claimant shall be established through the production of official valid documents,” it said.
Post-June 1, if a person does not have an Aadhaar number at the time of opening of an account, then he or she has to furnish proof of application for enrollment for Aadhaar and submit the Aadhaar number to the bank within six months of opening 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 six months from the date of commencement of the account-based relationship,” the notification said.