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Writ challenging RBI orders on linking bank accounts to Aadhaar filed: reports

Opposition for linking Aadhaar to bank accounts is increasing. A writ has been filed in the Supreme Court of India challenging the validity of the Reserve Bank of India’s (RBI) decision to make the linkage mandatory, as indicated by this Economic Times report.

Over the weekend, the RBI clarified its position on linking bank accounts to Aadhaar and said that Prevention of Money Laundering rules will apply and as such Aadhaar cards need to be linked to bank accounts. “These Rules have statutory force and, as such, banks have to implement them without awaiting further instructions,” the RBI instructed banks. An RTI question filed by MoneyLife had revealed that the RBI had not issued any specific instructions for linking bank accounts.

The petition was filed by Kalyani Menon Sen, a feminist scholar, through advocate Vipin Nair and said that the decision to amend the Prevention of Money Laundering Act (PMLA) was a violation of the promise that Aadhaar was voluntary. By amending the PMLA, the government is coercing citizens to part with their biometrics. Any bank account holder who does not wish to link Aadhaar to bank accounts is treated as an offender under the PMLA.

Further, the Aadhaar Act also mentions that governments and companies have to mention reasons for quoting the Aadhaar and that it would also have to mention the same while receiving subsidies or services for money drawn from the Consolidated Fund of India. As such, the opening of bank accounts by private and public sector banks and operating them does not fall under any subsidy, service or benefit.

In August, the Supreme Court ruled that Privacy is a Fundamental Right in a unanimous 9-0 ruling. However, the question whether Aadhaar violates the fundamental right was left to a five-judge bench and cases will be heard in November.

Bank union wants bank account linking to be put on hold

Meanwhile, the All India Bank Employees Association (AIBEA) protested instructions given by some banks to designate certain branches as special cells for enrolment of Aadhaar, PTI reports. It also maintained that the government should make it clear that enrolment was voluntary and not mandatory for services.

No clarity for wallets either

Note that the RBI also came out with revised guidelines for wallets in the country. While the guidelines mentioned that PMLA rules will apply, it does not specify explicitly that users have to link their Aadhaar for wallets. There is confusion among wallet players where they could perform regular KYC for users or if they have to perform Aadhaar eKYC. Last week, users started reporting that Paytm, the largest wallet player in India, degraded accounts with KYC to a lower limit and wanted them to re-verify themselves using Aadhaar KYC. More details from Srikanth’s blog post.

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    © 2008-2018 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ