New Delhi: After the Supreme Court judgment that restricted all private entities, including banks, against using Aadhaar for customer identification or KYC service, the Unique Identification Authority of India (UIDAI) has given clear instructions to all banks that the Aadhaar card cannot be used to open bank account. However, there are two cases where, the UIDAI has said, banks can use Aadhaar for customer verification.
For getting subsidy into bank account:
If you want money from any government subsidy, like that for LPG connections, or any other welfare scheme to be transferred directly to your bank account, then your bank may still seek your Aadhaar number because according to the Supreme Court order, Aadhaar is must for availing subsidies through direct benefit transfer (DBT) scheme.
In a letter to banks, the UIDAI has made it clear that banks can use Aadhaar e-KYC to authenticate beneficiaries of government subsidies and welfare schemes, a PTI report has said.
In such cases, Aadhaar e-KYC can also be used for opening of new bank accounts, but only for those signing a declaration that they want subsidies directly into their bank accounts.
Besides this, banking institutions have also been allowed to use Aadhaar for facilitating the withdrawal of money through Aadhaar-based micro-ATM machines. This means the Aadhaar-enabled payment system (AePS) and BHIM Aadhaar Pay shall remain operative and banks can continue to maintain and provide these facilities so that direct benefit transfer beneficiaries can withdraw their money through micro-ATMs, AePS and BHIM Aadhaar Pay.
Also read | What Supreme Court’s Aadhaar verdict means for you: 10 points
Voluntary use of Aadhaar:
Unless you want subsidy directly into your bank account, financial institutions cannot ask you to open new accounts using Aadhaar-based e-KYC. But, according to a PTI report quoting a UIDAI official, there are no restrictions on using a physical copy of the Aadhaar card for verification of a new customer’s identity if he or she wants it.
In short, if you find Aadhaar convenient and safe then you can use it to open a bank account. However, the use of Aadhaar remains voluntary and you need a physical copy of an offline electronic copy of your Aadhaar card as e-KYC isn’t allowed.
According to fresh rules, banks can use the QR code on your Aadhaar card to make the KYC process paperless in such cases and can even develop an app for the purpose.