In Focus

'Self-declaration' works for banks, helps update Aadhaar KYC too

A Draft Correspondent | Delhi

In what comes as a boon for millions of migrant workers and contractual employees  spread across India whose work entails extensive travel and lodging in different zones throughout the period, the Central Government has amended the Prevention of Money-laundering (Maintenance of Records) Rules 2005 and published the same in the Official Gazette on 13 November 2019.


These rules, called the Prevention of Money-laundering (Maintenance of Records) Fifth Amendment Rules, 2019, come into force on the date of their publication in the Official Gazette ie 13 November 2019.

Accordingly, in the Prevention of Money-laundering (Maintenance of Records) Rules, 2005, in rule 9, after sub-rule (18), following sub-rule shall be inserted namely:-- “(19) Where a client has provided his Aadhaar number for identification under clause (a) of sub-rule (4) and wants to provide a current address, different from the address as per the identity information available in the Central Identities Data Repository, he may give a self-declaration to that effect to the reporting entity.”

With this, private individuals across India can provide a 'self-declaration' detailing his/her address to the financial institution or banking authority demanding a 'local' address as part of a KYC norm. Banks across India, curbed by the inadequacy of the Rules to provide for the same had given ultimatums to customers to provide copies of 'updated' Aadhaar Card with local addresses to continue operating their accounts failing which the banks would be left with little option but to suspend their accounts.

Refusal on the part of the bank or financial institution will tantamount to 'a deficiency of service' and concurrently warrant redress and compensation through a consumer forum. Consumers may download a copy of the published Gazette Notification here.

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