1. Black Money fight: Beware! Banks take this big Aadhaar card step under PMLA

Black Money fight: Beware! Banks take this big Aadhaar card step under PMLA

The Government has made it mandatory for banks and financial institutions to check the original identification documents of individuals dealing in cash above the prescribed threshold, to weed out the use of forged or fake copies.

By: | New Delhi | Updated: October 22, 2017 3:51 PM
banks, financial institutions, bank deposits, PMLA, money laundering, bank rules, bank photo IDs, cash deposit, forged bank documents, bank documentation, fake documents The new rule now requires the reporting entity to compare “the copy of officially valid (identification) document so produced by the client with the original and recording the same on the copy”. (Reuters)

The Government has made it mandatory for banks and financial institutions to check the original identification documents of individuals dealing in cash above the prescribed threshold, to weed out the use of forged or fake copies. The Department of Revenue in the Finance Ministry has issued a gazette notification making an amendment to the Prevention of Money-laundering (Maintenance of Records) Rules. The new rule now requires the reporting entity to compare “the copy of officially valid (identification) document so produced by the client with the original and recording the same on the copy”. The Prevention of Money Laundering Act (PMLA) forms the core of the legal framework put in place by India to combat money laundering and generation of black money. The PMLA and its rules impose obligation on reporting entities like banks, financial institutions and intermediaries to verify identity of clients, maintain records and furnish information to Financial Intelligence Unit of India (FIU-IND). As per Rule 9, every reporting entity shall at the time of commencement of an account-based relationship, identify its clients, verify their identity and obtain information on the purpose and intended nature of the business relationship.

Intermediaries like stock broker, chit fund company, cooperative bank, housing finance institution and non-banking finance companies are also classified as reporting entities. Biometric identification number Aadhaar and other official documents are required to be obtained by the reporting entities from anyone opening a bank account as well as for any financial transaction of Rs 50,000 and above. The same is also required for all cash dealing of more than Rs 10 lakh or its equivalent in foreign currency, cash transactions where forged or counterfeit currency notes have been used and all suspicious transactions. All cross border wire transfers of more than Rs 5 lakh in foreign currency and purchase and sale of immovable property valued at Rs 50 lakh or more also fall under this category, according to the reporting rules.

The Gazette notification said in case the officially valid document furnished does not contain updated address, a utility bill like electricity, telephone, post-paid mobile phone, piped gas or water bill which is not more than two months old can be considered as a proof of address. Also, property or municipal tax receipt, pension or family pension payment orders issued to retired employees by Government departments, or letter of allotment of accommodation from employer can be considered for the same purpose.

  1. T
    tvraao
    Oct 25, 2017 at 11:22 pm
    Whether mAadhar application soft copy will be accepted by banks ?? I had bitter argument with passport officias to accept mAadhar as original.
    Reply
    1. R
      Reader
      Oct 22, 2017 at 4:33 pm
      The Supreme Court is yet to take a decision on the validity of Aadhaar and whether the State can compulsorily link Aadhaar to various programs and all financial transactions. The Supreme Court is set to hear peti-tions related to Aadhaar including those for scrapping the Aadhaar Act, stopping biometric profiling, and seeding bank and mobile databases, in the first week of November 2017.
      Reply
      1. R
        Reader
        Oct 22, 2017 at 4:32 pm
        A centralized and inter-linked biometric database like Aadhaar will lead to profiling and self-censorship, endangering freedom. Personal data gathered under the Aadhaar program is prone to misuse and surveillance. Aadhaar project has created a vulnerability to identi-ty fraud, even identi-ty theft. Easy harvesting of biometrics traits and publicly-available Aadhaar numbers increase the risk of impersonation, especially online and banking fraud. Centralized databases can be hacked. Biometrics can be cloned, copied and reused. Thus, BIOMETRICS CAN BE FAKED. High-resolution cameras can capture your fingerprints and iris information from a distance. Every eye hospital will have iris images of its patients. So another person can clone your fingerprints and iris images without your knowledge, and the same can be used for authentication. If the Aadhaar scheme is NOT STOPPED by the Supreme Court, the biometric features of Indians will soon be cloned, misused, and even traded.
        Reply
        1. R
          Reader
          Oct 22, 2017 at 4:32 pm
          UK’s Biometric ID Database was dismantled. Why the United Kingdom's biometrics-linked National Identi-ty Card project to create a centralized register of sensitive information about residents similar to Aadhaar was scrapped in 2010?? The reasons were the massive threat posed to the privacy of people, the possibility of a surveillance state, the dangers of maintaining such a huge centralized repository of personal information, and the purposes it could be used for, and the dangers of such a centralized database being hacked. The other reasons were the unreliability of such a large-scale biometric verification processes, and the ethics of using biometric identification. ( Identi-ty Cards Act 2006 and Identi-ty Documents Act 2010 )
          Reply
          1. R
            Reader
            Oct 22, 2017 at 4:31 pm
            The US Social Security Number (SSN) card has NO BIOMETRIC DETAILS, no photograph, no physical description and no birth date. All it does is confirm that a particular number has been issued to a particular name. Instead, a driving license or state ID card is used as an identification for adults. The US government DOES NOT collect the biometric details of its own citizens for the purpose of issuing Social Security Number. The US collects the fingerprints of only those citizens who are involved in any criminal activity (it has nothing to do with SSN), and the citizens of other countries who come to the US.
            Reply
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