After RTI confusion, RBI clear the air: linking Aadhaar to bank accounts mandatory

There is no escape from linking your Aadhaar to your bank account as the Reserve Bank of India on Saturday cleared the air on the controversy surrounding the legality of banks demanding Aadhaar numbers from customers.

The circular issued on 21 October by the central bank said, “The Reserve Bank clarifies that, in applicable cases, linkage of Aadhaar number to 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 awaiting further instructions.”

The circular came after a news report based on a right to information (RTI) query claimed that Aadhaar was not mandatory for operating bank accounts beyond 31 December.

What does it mean for you?

Over the past few months, banks have been persuading their customers to link their Aadhaar numbers with their bank accounts. To activate any dormant account, the banks have begun to demand the Aadhaar number of the account holder.

However, in certain cases, where the consumers used to argue over legality of the banks' demands, there used to be concessions. However, with the latest circular it would be mandatory for all account holders to link their banks accounts with Aadhaar, unless the Supreme Court, which is hearing the case, gives a decision against it.

What about other sectors?

Being the banking regulator, the RBI circular makes it mandatory for banks to demand the Aadhaar number of their customers, until the Supreme Court gives a final order in the case.

However, the same is not true for the telecom sector, where service providing companies have been demanding Aadhaar linkage for keeping phone services uninterrupted for consumers.

The Telecom Regulatory Authority of India (TRAI) is yet to come up with any such circular.

Similarly, in the food distribution sector, the Jharkhand government on Saturday said that Aadhaar card was not mandatory to collect food grains from the public distribution system. The statement came after a 11-year-old girl died of starvation in the state last week. The government came under fire as her mother was reportedly denied her ration in the absence of Aadhaar-linked ration card.

"Aadhaar card is not mandatory. Any card, including a driver's license and voter ID card or any specified card, is permissible for procuring food grains," the state's Food Minister Saryu Roy said.

What's the way ahead?

The Centre has already lost a debate on privacy in the Supreme Court in August this year where it had argued that the Right to Privacy is not absolute. Since civil society activists have alleged that Aadhaar is a threat to personal security, the debate is still ongoing.

However, until the Supreme Court gives a ruling against government's attempt to make Aadhaar mandatory, it will become difficult for those who choose to not link their accounts together after the deadline - be it for opening bank accounts or for using mobile services.