TNN | Sep 29, 2011, 07.05AM IST
MUMBAI: The Reserve Bank of India (RBI) while accepting the letter issued by Aadhaar (the name given to the Unique Identification Authority of India-UIDAI-project) as an identity proof, has insisted on a separate address proof to open a bank account.
It was widely expected that once a citizen gets registered under Aadhaar, a bank account could be opened without any further proof of address or identity. The RBI directive on the Aadhaar number will only meet halfway the "know your customer" (KYC) norms of banks. Bankers say that while it is possible for the poor to produce proof of identity in the form of a voter ID card, it is the proof of address that is a challenge since there are many who do not own a landline telephone or have any home ownership documents. Although India has a high mobile penetration, the majority of phones are pre-paid and customers do not have bills to support address proof.
In a circular to banks on Wednesday, RBI said: "It is reiterated that while opening accounts based on Aadhaar also, banks must satisfy themselves about the current address of the customer by obtaining required proof of the same as per extant instructions". The central bank has also decided to allow banks to use the UIDAI letter as proof of identity for opening all bank accounts and not just "no frills" accounts.
One of the objectives of the UIDAI was to serve as a single identification akin to the Social Security number in the US. Since the UIDAI project also included biometric identification it was meant to be a foolproof ID.
In June, the oil marketing companies Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation had said that they would accept Aadhaar as proof of identity and proof of address while accepting bookings for LPG cooking gas connections.
It was widely expected that once a citizen gets registered under Aadhaar, a bank account could be opened without any further proof of address or identity. The RBI directive on the Aadhaar number will only meet halfway the "know your customer" (KYC) norms of banks. Bankers say that while it is possible for the poor to produce proof of identity in the form of a voter ID card, it is the proof of address that is a challenge since there are many who do not own a landline telephone or have any home ownership documents. Although India has a high mobile penetration, the majority of phones are pre-paid and customers do not have bills to support address proof.
In a circular to banks on Wednesday, RBI said: "It is reiterated that while opening accounts based on Aadhaar also, banks must satisfy themselves about the current address of the customer by obtaining required proof of the same as per extant instructions". The central bank has also decided to allow banks to use the UIDAI letter as proof of identity for opening all bank accounts and not just "no frills" accounts.
One of the objectives of the UIDAI was to serve as a single identification akin to the Social Security number in the US. Since the UIDAI project also included biometric identification it was meant to be a foolproof ID.
In June, the oil marketing companies Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation had said that they would accept Aadhaar as proof of identity and proof of address while accepting bookings for LPG cooking gas connections.