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Less Than 50% Of Bank Accounts Linked To Aadhaar, Says Indian Banks’ Association

Less than 50 percent of bank accounts have been linked to Aadhaar numbers so far, says IBA. 



An Aadhaar biometric identity card, issued by the Unique Identification Authority of India (UIDAI). (Photographer: Dhiraj Singh/Bloomberg)
An Aadhaar biometric identity card, issued by the Unique Identification Authority of India (UIDAI). (Photographer: Dhiraj Singh/Bloomberg)

Only 50 percent of bank accounts have been linked to Aadhaar numbers so far, even though the current deadline to do so is less than a month away. VG Kannan, chief executive officer of the Indian Bank’ Association told BloombergQuint that while the process of linking is moving along, a little less than half the accounts have been linked so far.

The government had set a deadline of Dec. 31 for linking bank accounts with Aadhaar numbers. However, at a Supreme Court hearing on Thursday, the Government counsel said that they are not opposed to extending the deadline to March 31 for those who do not have an Aadhaar card yet.

Kannan said that while linking of accounts is easier in urban centers, in rural centers banks are trying to reach out to customers through letters, SMS and public notices.

In many case, we do not have a mobile number, especially for legacy accounts. There we have issues of sending messages to them. So, we are sending letters, messages, we are putting messages in banks.
VG Kannan, Chief Executive Officer, Indian Banks’ Association

Kannan, however, added that banks are confident that a ‘substantial’ proportion of accounts would be linked before the deadline expires. Accounts that are not linked by the deadline would be frozen.

“If the linkage doesn’t happen and there is no extension then the account won’t be operated till the person comes and gives the linkage,” Kannan explained.

In October this year, the Reserve Bank of India clarified that the linkage of bank accounts with Aadhaar numbers is mandatory following amendments to the Prevention of Money Laundering Rules. “These Rules have statutory force and, as such, banks have to implement them without awaiting further instructions,” the regulator said in a statement on October 21.

At a press conference on Wednesday, the RBI said it did not have data on what proportion of accounts have been linked to Aadhaar numbers.

Kannan of IBA said that banks have not raised any concerns over the linkage of bank account yet, except the issue of volume. “Linking is happening regularly on an ongoing basis. It is not happening at a pace which is desirable,” Kannan said.

Customers and banks may get some relief if the Supreme Court intervenes. Petitioners have sought a stay on various linking deadlines until the main challenge to the Aadhaar scheme is decided upon. The apex court will hear the plea for interim relief next week.

The Government counsel, however, argued that they are willing to extend the deadline only for those who do not have an Aadhaar card. This may only add to the confusion. It could be a ‘big task’ for bankers to determine whether a client has an Aadhaar card or not, cautioned Kannan.

Watch the full conversation here: