personal finance

Aadhaar is out, other documents back for banks


Mumbai: Bankers feel that with Aadhaar no longer mandatory, the alternative documents for KYC would be those officially valid as notified by the Reserve Bank of India (RBI) circular on Aadhaar.

The five officially valid documents include the passport, driving licence, voter ID card, PAN card and job card issued by the NREGA. These were notified by the RBI in July 2017 following a government notification on prevention of money laundering.

Lenders say they are waiting for a view from the RBI on how to deal with Aadhaar numbers already collected from accountholders. Prior to the SC stay, customers were forced to link Aadhaar with their bank accounts. Now, the order makes it voluntary, which means that customers can opt out of linking their Aadhaar.

“Aadhaar is the only document that is issued solely for identification. All other documents are issued for a purpose. Voters ID is the only document that is universally issued but it is available only to adults,” said a bank official. Bankers say that in the past, accounts opened under assumed identities were largely done using voter ID or PAN cards acquired through impersonation. However, linking of Aadhaar with the PAN card has reduced fraudulently obtained cards.

Prior to the July 2017 notification, the list of officially valid documents were the same as at present, except for an additional item ‘any other document required by the bank or finance company’. Banks were using this leeway to accept various documents ranging from ration cards to utility bills and employers’ letters for completing the KYC process. After July 2017, even without Aadhaar becoming mandatory, banks had a limited choice in terms of KYC documents.

In case the officially valid documents furnished by the customer do not contain updated address, the bank has to call for additional documents such as recent utility bills (electricity, telephone, post-paid mobile phone, piped gas, water bill), property or municipal tax receipt, pension or family pension payment orders issued to retired employees by government departments or PSUs, and letters of allotment of accommodation from employers issued by state government or central government departments.





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