Only RBI has the power to issue directives to banks, says Indian Banks’ Association
Mumbai: The Indian Banks’ Association (IBA) has questioned the jurisdiction of the Unique Identification Authority of India (UIDAI) in issuing directions to banks under the Aadhaar Act, according to two people aware of the matter.
IBA has written to the ministry of electronics and information technology, the Reserve Bank of India (RBI) and the finance ministry’s department of financial services (DFS), arguing that only the central bank is empowered to issue directives to banks under the Banking Regulation Act, the two people said on condition of anonymity.
On 14 July, UIDAI first asked banks to open Aadhaar enrolment and updating facilities in at least one-tenth of their branches by the end of August. Later, it extended the deadline by a month and said it will impose a Rs20,000 fine per uncovered branch after 30 September, the Press Trust of India reported on 5 September, citing UIDAI chief executive Ajay Bhushan Pandey.
Now, in another directive on 7 October, UIDAI has made it mandatory for banks to act as both the Aadhaar registrar and enrolment agency. Banks will no longer be able to engage with private agencies for Aadhaar enrolment of their customers, it said.
“Banks shall complete the task of setting up Aadhaar enrolment and update center in 15,200 bank branches by 31 October. The centres shall be operated by banks directly inside bank branches without involvement of any private Aadhaar enrolment agencies,” said the circular, a copy of which has been reviewed by Mint.
The latest revision mandating that Aadhaar enrolment be done by banks directly comes after they had started the process of on-boarding private agencies for the opening and updating of Aadhaar accounts.
“State Bank of India (SBI) had already appointed 400 agencies for Aadhaar enrolment. The bank will now have to rework the strategy and allot its existing staff to do the process.,” said Neeraj Vyas, deputy managing director at India’s largest lender. “We are looking to set up 3,000 centres across rural and semi-urban areas.”
Please click here to read more.