Aadhaar must for transactions of Rs50,000 and above, bank accounts

The government has made Aadhaar identity mandatory for opening of bank accounts and for all financial transactions of Rs50,000 and above, expanding its supervision of financial transactions across the country.

Accordingly, all existing bank account holders have to furnish their Aadhaar number latest by 31 December 2017, failing which the account will cease to be operational, according to a Revenue Department notification.

In a notification issued amending the Prevention of Money-Laundering (Maintenance of Records) Rules, 2005, the I-T Department has made quoting of Aadhaar along with PAN or Form 60 by individuals, companies and partnership firms for all financial transactions of Rs50,000 or above mandatory.

The government has already made seeding of Permanent Account Number with Aadhaar mandatory in order to avoid individuals using multiple PANs to evade taxes.

Also, as per the amended rules, small accounts, which can be opened without having officially valid KYC documents and with maximum deposit of Rs50,000, can be opened only at bank branches which have core banking solution.

It can also be opened at a branch where it is possible to manually monitor and ensure that foreign remittance are not credited to such account and stipulated limits on monthly and annual aggregate of transactions and balance are not breached, according to the amended PMLA rules.

Such small account should remain operational for a period of 12 months and thereafter for a similar period if the account holder provides evidence that he or she has applied for officially valid identification documents.

''The small account shall be monitored and when there is a suspicion of money laundering or financing of terrorism or other high risk scenarios, the identity of claim shall be established through the production of official valid documents,'' it said.

The amendment makes it mandatory for individuals, companies and partnership firms to quote Aadhaar along with PAN or Form 60 for all financial transactions of Rs 50,000 or above with effect from June 1.

Post-June 1 if a person does not have an Aadhaar number at the time of opening of account, then he has to furnish proof of application of enrolment for Aadhaar and submit the Aadhaar number to the bank within six months of opening of the bank account.