On the subject of the use of Aadhaar to facilitate delivery of social welfare benefits by direct credit to the bank accounts, Reserve Bank of India vide its circular RBI/2015-16/289/FIDD.CO.LBS.BC. No.17/02.01.001/2015-16 dated January 14, 2016 had clarified that the use of Aadhaar Card and seeding of bank accounts with Aadhaar numbers is purely voluntary and it is not mandatory. The above notification was in view of the Hon’ble Supreme Court of India’s interim orders dated August 11, 2015 and October 15, 2015 (W.P. ( c ) No. 494 of 2012) on usages of Aadhaar.
In supersession of above Circular, RBI vide its circular RBI/2019-20/40 dated August 13, 2019 notified that banks need to ensure that opening of bank accounts and seeding of Aadhaar numbers with existing or new accounts of eligible beneficiaries opened for the purpose of Direct Benefit Transfer (DBT) under social welfare schemes, should be in conformity with the provisions listed under Section 16 of the Master Direction – Know Your Customer (KYC) direction, 2016 (updated as on May 29, 2019) and extant provisions of the Prevention of Money Laundering (PML) Rules.
