The Centre on Tuesday notified new rules that essentially pave the way for the government to extend the deadline to link bank accounts with Aadhaar numbers.
A new rule modifying the Prevention of Money Laundering Act, 2002 has been notified to replace the requirement of submitting "the Aadhaar number and Permanent Account Number by December 31, 2017" with "submit the Aadhaar number, and Permanent Account Number or Form No. 60, by such date as may be notified by the Central Government".
The notification, issued by the Finance Ministry's Department of Revenue, effectively paves the way for extending the deadline for mandatory quoting of Aadhaar for activities like the opening of a bank account.
The government in the rule change has not specified a date, but it must be noted that the Centre previously told the Supreme Court it was willing to extend bank account-Aadhaar linking deadline to March 31, 2018 instead of the current December 31, 2017.
Under the PMLA, banks and other financial institutions are required to obtain Aadhaar, PAN and other official documents from citizens opening a bank account as well as for any financial transaction of Rs 50,000 and above.
The notification issued yesterday says that accounts where Aadhaar and PAN are not furnished by the date notified by the government will cease to be operational.
If the account holder "fails to submit the Aadhaar number and PAN by such date as may be notified by the central government, the said account shall cease to be operational till the time the Aadhaar number and Permanent Account Number is submitted by the client", it said.
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. PMLA The PMLA and its rules impose an obligation on reporting entities like banks, financial institutions and intermediaries to verify the identity of clients, maintain records and furnish information to the 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 stockbroker, 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 rule also applies to 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 dealings.
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 notification issued yesterday said amendments are being made in Rule 9 of the Prevention of Money-laundering (Maintenance of Records) Rules, 2005.
(With PTI inputs)