New Delhi, December 13, 2017
The government has amended rules requiring mandatory quoting of national biometric identifier Aadhaar and PAN for certain financial transactions such as opening of a bank account by keeping the deadline open-ended in place of the current December 31.
A new rule modifying the Prevention of Money Laundering Act of 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 by the Department of Revenue in the Finance Ministry effectively paves the way for extending the deadline for mandatory quoting of Aadhaar for activities like the opening of a bank account. This is in line with the Centre last week informing the Supreme Court that it is willing to extend till March 31 the deadline fixed for mandatory linking of Aadhaar to avail of various services and welfare schemes.
On December 7, the deadline for linking PAN with Aadhaar was extended by three months to March 31, 2018. Under the PMLA, Aadhaar, PAN and other official documents are required to be obtained by banks and financial institutions from anyone opening a bank account as well as for any financial transaction of Rs. 50,000 and above.
The notification issued yesterday stated 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. 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).
According to 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 such as stockbrokers, chit fund companies, cooperative banks, housing finance institutions 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 dealings 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.
[The Hindu Business Line]