With regard to linking of bank account with Aadhaar, Ministry of Electronics and Information Technology (MeitY) has apprised that “The Aadhaar and Other Laws (Amendment) Bill, 2019” has been passed by the Parliament.  The bill, inter-alia, has the  provision for allowing the use of Aadhaar authentication on voluntary basis as acceptable Know Your Customer (KYC) document, by inserting Section 11A under the Prevention of Money Laundering Act, 2002.

Further, as per Reserve Bank of India (RBI’s) Master Direction on KYC dated 25.2.2016 (as amended in May 2019), banks are to obtain the Aadhaar number from an individual who is desirous of receiving any benefit or subsidy under any scheme notified under section 7 of the Aadhaar (Targeted Delivery of Financial and Other subsidies, Benefits and Services) Act, 2016 (18 of 2016).

Account holders under Pradhan Mantri Jan-Dhan Yojana (PMJDY) are provided with a RuPay Debit card, having an inbuilt accident insurance cover of ₹ 1 lakh (₹ 2 lakh for PMJDY accounts opened after 28.08.2018). As apprised by National Payments Corporation of India (NPCI), linking of Aadhaar is not mandatory for activation of RuPay cards.

This was stated by Shri Anurag Singh Thakur, Minister of State for Finance & Corporate Affairs in a written reply to a question in Rajya Sabha today.

Aadhaar voluntary authentication affirmed as an acceptable KYC mechanism; subsidy-linked collection and nonmandatory RuPay linkage clarified. Aadhaar authentication is now permissible on a voluntary basis as an acceptable KYC mechanism within the antimoney laundering framework, while banks must collect Aadhaar from individuals seeking benefits or subsidies under the Aadhaar scheme; linkage of Aadhaar is not mandatory for activation of RuPay debit cards per payment system operator guidance.