Demonetization has brought in loads of changes in the financial system of the country. From change in notes to new rules and regulations to the banking system, Mr. Narendra Modi has introduced too many changes in the banking sector. Some liked it, few more disliked it – but none had a choice expect to accept the transformations.
Govt Makes Aadhaar Mandatory for Opening Bank Account, Transactions Over Rs 50,000
Banks and financial institutes have undergone major policy changes since November 2016 – be it in opening bank accounts, deposits and withdrawals too. In fact, for some months, people faced a lot of problem related to withdrawals, but eventually the problem began to subside.
One major change that has been brought in is linking of Aadhar Card and PAN Card with the bank account. Initially, after demonetization, no banks accepted deposits of old notes without the proof of Aadhar Card.
Why was this change brought in?
This decision was brought in by the Government of India under Demonetization and another law called the Benami Law that was undertaken with the main aim of eliminating all sources and dealings in black money. Producing an Aadhar Card made sure that no person was able to use multiple income tax identity cards to take advantage of tax exclusions.
High Value Transactions
After demonetization, it was noted that if any transaction above a certain amount is being taken care of, then the respective account holder shall be present in person to carry out the transaction. In fact, there was a restriction to high value withdrawals in one day, which eventually was increased and brought back to normal.
Aadhar Made Mandatory for transactions above Rs. 50, 000
A rule called the Prevention of Money laundering Rules, 2005 has brought in this important notification that provision of Aadhar Card (sometimes along with PAN Card and/or Form 60) has become mandatory for all individuals, companies and partnership firms that are entering into any transaction relating to amounts of Rs. 50, 000 or above.
ID Proof made compulsory while opening bank accounts too
While transactions related to high net worth have to be backed up by an ID proof of the account holder, the Government has also made it imperative to link Aadhar Card with your new bank account. Existing bank account holders will also have to furnish their Aadhar Cards to the bank officials while withdrawing or depositing high valued amounts in the bank.
Laws applicable to small account holders also
While high valued account holders have to produce their Aadhar Card for transactions above Rs. 50, 000 even small account holders have been enforced with a law that they can have a deposit of Rs 50, 000 at the maximum at once. Before all these new rules, any individual could open a bank account without their KYC documents, but now KYC clearances is required and PAN and Aadhar cards have to be linked so that they can be verified while making higher value transactions.
So, gear up and have your Aadhar and PAN card linked to your bank account and ensure you are carrying the original copy with you while making high value transactions. 🙂