Aadhaar, PAN card now mandatory to open a bank account, move subject to final decision of Supreme Court
The Reserve Bank of India (RBI) has issued a directive on Know Your Client (KYC) guidelines stating that both Aadhaar and Permanent Account Number (PAN) card will be made mandatory for opening of a bank account.
The RBI says using Aadhaar for customer verification is necessary to ensure that no fraudulent account is opened. The RBI has added that the new rules were subject to the final judgment of the Supreme Court on Aadhaar.
The RBI says that the decision to include both Aadhaar and PAN card was to prevent money laundering. It will also make the KYC process easier. People would be able to manage their accounts better.
In addition, for security purposes, customers will be marked as low, medium and high risk category.
Customers who do not possess either the Aadhaar or PAN card, will have small accounts opened by RBI. These will be subject to some conditions like a limit on the number of monthly and annual transactions.
For opening the small account, the customer has to give a self-attested photograph. The account will be monitored for fraudulent transactions.
Complete biometric based electronic KYC authentication will also have to be completed by the customer for proper functioning.