Mumbai: Last week, the Supreme Court said that customers can’t be forced to link their bank accounts to Aadhaar. It also states that a bank account will not be denied or ceased on the basis that he or she does not have an Aadhaar number. However, in the last couple of years most banks had started opening online bank accounts using Aadhaar and one-time passwords (OTP).

Now, what happens to those bank accounts that were already opened using Aadhaar and OTP? “Kotak’s 811 is built on RBI’s Aadhaar-based OTP authentication guideline (dated December 8, 2016) for opening bank accounts. We do not foresee any adverse impact on Kotak’s savings account opening growth because of the SC ruling. Aadhaar continues to be available as a KYC document if a customer voluntarily chooses to submit the same," said Virat Diwanji, president, retail liabilities and branch banking, Kotak Mahindra Bank Ltd.

“Further, Aadhaar continues to be one of the six officially valid documents (OVD) available to customers for completing KYC requirements. Customers are welcome to use any one of the six OVDs of their choice for the purpose of account opening. We are also examining in detail the recent SC ruling in this regard and will be further guided by the same and RBI guidelines," Diwanji said. Most banks have started mentioning on their websites that providing Aadhaar-OTP for know-your-customer (KYC) is now optional.

According to bankers, after the judiciary has given its view, the judgement has to be absorbed by the product owner – UIDAI, department of banking and ministry of financial services and the banking regulator.

There are three recipients that have to absorb the judgement, bring their own interpretations in line with the judgement and then pass the circular for banks to implement. “The collective view right now is that I can’t directly consume the judgement and put it into action. Because, whatever I do, I do bases what the regulator tells me," said a private banker. Hence, for this to work, the central bank will have to amend its KYC guidelines. In the April 20 circular, the Reserve Bank of India (RBI) had stated that if you want to open a new savings bank account, you need to produce your Aadhaar as well as PAN (permanent account number) or Form 60, subject to the final SC judgement. Considering that the apex court has said that it is not mandatory to link Aadhaar to a bank account, the RBI is likely to amend its KYC.

Hence, only after the directive will it be clear, whether banks are allowed to use Aadhaar to do your KYC. If you plan to delink your Aadhaar from a bank account, where the only KYC document used was Aadhaar, then you will have to go through the KYC process again as your bank account will no more be valid. For customers, where the KYC was done using other officially valid documents and if you had already linked your Aadhaar, you can delink it. However, banks have not provided details yet.

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