Aadhaar Card Permitted for Bank Account Opening in 2 Specific Cases

With the Supreme Court verdict on private entities and banks not being allowed to use the Aadhaar Card for the purposes of “know your customer” (KYC) customer verification, it appears that there are two specific instances where an individual will still be able to use her or his Aadhaar card for the purposes of availing banking services.


The first instance involves the availing of government subsidies, such as those that a person is likely to receive for authenticated and official LPG purchases, the direct benefit transfer (DBT) scheme will require an individual to furnish her or his Aadhaar Card to the bank where the account is being held as part of the verification process to link the scheme with the account. The same goes for any government welfare schemes that have a DBT payment system, as intimated to banks by the Unique Identification Authority of India (UIDAI). These services extend to the opening of bank accounts for the purposes of receiving DBT payments, and also the Aadhaar-enabled payment system (AePS) that allows withdrawal of money from Aadhaar-based micro-ATM machines of the bank.


The second instance is purely voluntary, in that if an individual wishes to utilize the Aadhaar Card as her or his preferred from of identity or address verification, she or he may do so and indicate that this was the case when making such a submission. The primary difference in this case is that hard copies of the Aadhaar Card will have to be submitted as banks are not permitted to use electronic KYC as a form of verification.

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