Mass camps to help people open no-frills accounts with Aadhaar card

“The concerns of the states were very valid that account opening is difficult. So, the idea would be to admit the problem and, then, find a solution. We are going ahead with that,” financial services secretary DK Mittal told reporters after attending a meeting, chaired by finance minister P Chidambaram, with northern states and Union Territories, along with heads of public sector banks and financial institutions.

“We as the government of India are committed to that. Aadhaar is a KYC (Know Your Customer) for no-frills account," he said.

However, he added that for normal accounts, Aadhaar will only be one of the identity proofs. Other identification proofs, as mandated by the RBI, will also be required as the banking regulator — going by international norms to curb money laundering —wanted India, too, to have stringent KYC norms for account opening.

His comments came after Delhi CM Sheila Dikshit said most chief ministers who attended the meeting raised the problems faced by people in opening bank account using Aadhaar. According to Dikshit, many poor people were facing difficulties in opening bank accounts because banks demanded residence proof despite submission of a copy of the Aadhaar card.

Dikshit asked Chidambaram to eliminate the ‘obstacles’ in opening no-frill bank accounts for beneficiaries of government subsidies so that the state government could directly transfer to the their accounts cash subsidies and other benefits.

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