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Banks told to be vigilant on Aadhaar
Context
The Unique Identification Authority of India (UIDAI) has asked banks to provide Aadhaar-based onetime password (OTP) for opening of bank accounts only in the presence of the customer, in a banking outlet
Backdrop
There have been instances of misuse of Aadhaar while opening accounts like usage of a stolen Aadhaar copy to open a bank account and obtain credit, debit card
Why these directions might be a huge blow to certain banks?
Some banks are heavily dependent on Aadhaar-based OTP authentication process for account opening (where the customers do not have to visit branches) or use tab banking to open accounts by visiting the customer’s residence
Limits on accounts opened via Aadhaar-based OTP authentication
There are limits for accounts that are opened through Aadhaar-based OTP authentication process, like deposits cannot exceed Rs. 1 lakh and full KYC requirements, which is submission of documents and giving biometric details, were needed to be made in 1 year
