Opening a bank account just got easier with the Reserve Bank of India (RBI) having accepted the Unique Identification Number or Aadhaar as a know-your-customer (KYC) for both proof of identity and address for opening a new bank account.
An RBI circular said, "… the Unique Identification Authority of India (UIDAI) has advised Reserve Bank that banks are accepting Aadhaar letter issued by it as a proof of identity but not of address, for opening accounts.... if the address provided by the account holder is the same as that on Aadhaar letter, it may be accepted as a proof of both identity and address."
Besides speeding up financial inclusion, the RBI move would also help the government's efforts to transfer subsidies in cash to bank accounts of the beneficiaries using the Aadhaar platform.
At present, for accounts of individuals, separate sets of documents have been listed for identity and address verification and banks ask for these separate documents despite the documents for identity proof (passport, PAN card, drivers’ licence ) also carrying the address.
"In view of this, customers frequently complain about the requirement of producing two sets of documents, one each for identity and address proof,” RBI said in a circular dated 10 December, amending the rules under prevention of money laundering Act.
The move will ease the burden on prospective customers in complying with KYC requirements for opening new accounts.
According to the new guidelines, if the address on the document submitted for identity proof by the prospective customer is the same as that declared in the account opening form, the document may be accepted as a valid proof of both identity and address.
However, if the address on the document submitted for identity proof differs from the current address mentioned in the account opening form, a separate proof of address should be obtained.
In fact, the UIDAI - which is the nodal authority to issue Aadhaars - has advised RBI that banks are accepting Aadhaar letter issued by it as a proof of identity but not of address, for opening accounts. Hence, if the address provided by the account holder is the same as that