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Bank needs your consent before using your Aadhar

The Aadhaar Card can be used by the Bank for the KYC process but not without your consent. The RBI has reportedly said that authentication or offline verification process cannot be carried by the bank unless an individual himself uses his Aadhar number for identification purpose. In fact, the proof of possession of Aadhar number has been added to the list of Officially Valid Documents, states the Central Bank. Also, one must provide Aadhar and get an E-KYC authentication if he/she receives Direct Benefit Transfer (DBT).


The Aadhar number can be voluntarily provided by a customer while opening a bank account. Though the bank can never use one’s Aadhar without his/her consent. If a customer himself permits using his Aadhaar, the bank gets to use it during the authentication and E-KYC process. Even non-banking finance companies and other regulated entities also need the consent of an individual before using Aadhar for KYC. However other companies are not allowed to use it for E-KYC but have the liberty to use it in offline mode. A company who has the liberty to use one’s Aadhar for Customer Due Diligence has to blackout the Aadhaar number.



Aadhaar has now been accepted as one of the officially valid documents. Post the Supreme Court Verdict on Aadhar in 2018, the opening of bank accounts based on Aadhar and EKYC had stopped. Fintech Companies also had stopped adding customers for lending and payments through E-KYC.

E-signature that the Aadhar-based KYC was being used. The RBI has now however granted the permission of using Aadhar KYC with consent. Hence even fintech companies and banks would offer Aadhar-based account-opening processes and E-KYC. In fact, new technology is being worked on by the fintech companies to do KYC through Video and Voice assistant.

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