The Indian government’s tax agency has announced that individuals who opened bank accounts between July of 2014 and August of 2015 will need to link their accounts to their Aadhaar numbers.
The move represents another significant expansion of India’s biometric national ID program which is increasingly being used for authentication in the country’s financial services sector and beyond. In announcing the requirement, India’s tax office framed it as part of an effort to bring the country into compliance with the Foreign Account Tax Compliance Act, an agreement between Indian and the US aimed at exposing tax evasion.
Nevertheless, the requirement could come under legal scrutiny. India’s Supreme Court has so far refused to issue a final ruling on whether the government can make the program mandatory for government services, but recently weighed in on the issue of social subsidies, saying Aadhaar cannot be a requirement for access. Then again, reports suggest that the tax agency’s new ruling leaves banks with the decision as to whether accounts will be allowed to stay open even if their owners do not provide their Aadhaar numbers, which may complicate whether this is seen as a government requirement or one under the purview of the banks.
Account holders to which the new regulation applies have until April 30th to submit their Aadhaar information.
April 12, 2017 – by Alex Perala