While the Aadhaar number is not mandatory to open Bank accounts, there are a number of banking fraud cases coming to light every day. Read on to know more…
In India, lakhs of people have linked their bank accounts to their Aadhaar number under threat from banks that their accounts and banking services would be frozen. This is no longer mandatory after the Supreme Court judgement on this issue. In September this year, the Supreme Court declared Section 57 of the Aadhaar Act as unconstitutional. This means bank account-holders, e-wallet or mobile wallet users and mobile subscribers are no longer required to use their Aadhaar number. Following the judgement, the department of telecommunication (DoT), on 26th October directed all unified license holders to discontinue use of Aadhaar eKYC for issuing new SIM and re-verification of existing subscribers before 5 November 2018.
Earlier in July 2018, National Payments Corp of India (NPCI), which developed and promotes UPI and Bharat interface for money application (BHIM), had asked banks to discontinue Aadhaar-based payments through the UPI and immediate payment system (IMPS) channels. Pay to Aadhaar is an additional functionality in UPI and IMPS where the payer can transfer funds to the beneficiary using an Aadhaar number.
“Aadhaar number is a sensitive information and the revised framework about its usage in the payment landscape is still evolving. With this background, we proposed removal of ‘Pay to Aadhaar’ functionality in both UPI and IMPS before the steering committee (meeting held on 5 July 2018). The proposal of removing the Aadhaar number functionality was approved by the steering committee,” NPCI had said in a circular issued on 17 July 2018. Following the NPCI circular, SBI removed pay to Aadhaar functionality from its BHIM SBI Pay app citing regulatory guidelines.
Senior bank officers have warned that there are a number of cases coming to light every day where bank customers are being duped when they share their Aadhaar number linked to their bank account. Fraudsters are also using unified payments interface (UPI) to siphon money from customers’ accounts. This is because ‘Pay to Aadhaar’ (number) is an additional functionality in UPI and allows withdrawals through this route as well. This only underlines the need for people to urgently de-link Aadhaar number from the bank accounts — especially those who are less tech-savvy or financially literate.
In fact, this warning comes from none other than D Thomas Franco, former general secretary of All India Bank Officers Confederations (AIBOC), which is the largest bank officers’ union in India. Franco narrates this story in a bank WhatsApp group on a new way to dupe hapless people. “On 21st December, Dr Lalmohan was asked to give his Aadhaar number from a caller posing as a manager of State Bank of India (SBI). Within a few minutes, his account was debited online for Rs5,000 and Rs20,000. He immediately called customer care and got his account blocked. However, further withdrawals took place all through UPI and the entire balance in his account, except for Rs200 vanished. He had not shared his password. The bank says there was a hold (block) on his account but these withdrawals still took place online. Aadhaar seems to be the culprit.”
While RBI was quick to fall in line with the finance ministry in issuing master directions for Aadhaar, post the SC order, it has not issued any notification in this regards or asked banks to de-link Aadhaar number of account holders.
Despite the Supreme Court ruling linking of Aadhaar with bank accounts or mobile number as invalid, the banking regulator has yet to issue a notification for this. It is time for bank account-holders to de-link Aadhaar number, if linked, from their accounts and also not to share the number and any details related with their bank account with anyone, especially over phone or email.