Existing bank account holders have been asked to furnish their Aadhaar number failing which the account will cease to be operational, says a Revenue Department notification.

The government, through a notification amending a prevention of money laundering law, has made it mandatory to provide Aadhaar to open a bank account and to conduct a transaction of Rs 50,000 or more.

The notification amending the Prevention of Money-laundering (Maintenance of Records) Rules, 2005, although dated June 1, was not gazetted till Friday. It says that that individuals who are eligible to be enrolled for an Aadhaar number need to provide that number and the Permanent Account Number (PAN) to open a bank account or conduct any transaction “of an amount equal to or exceeding rupees fifty thousand, whether conducted as a single transaction or several transactions that appear to be connected, or any international money transfer operations”.

“See, this doesn’t really matter, because everybody who has a PAN card has to get Aadhaar,” Girish Vanvari, Partner and Head of Tax at KPMG India told The Hindu. “The Supreme Court order regarding this has effectively been overruled by this rule.”

“And given that we have till July 1 to apply for Aadhaar to comply with this, it is not an issue whether the notification came out on June 1 or today,” Mr Vanvari added, saying that he had not heard of this notification till Friday.

“This is in line with the recent global thinking about putting up mechanisms to ensure there is no income that escapes the tax net,” SP Singh, Senior Director of Tax at Deloitte India said. “This is part of the overall thinking of the government.”

The Supreme Court had on June 9 ruled that while those possessing an Aadhaar ID must link it to their PAN, those who have as yet not got an Aadhaar need not do so in order to file returns—their PAN cards will not be rendered void, something the government had said would happen in the Finance Bill 2017.

The amendment also tightens the rules for small accounts, which can be opened without having officially valid KYC documents, by saying that such accounts can only be opened only at bank branches that have core banking solution.

“The small account shall be opened only at core banking solution linked banking company branches or in a branch where it is possible to manually monitor and ensure that foreign remittances are not credited to a small account and that the stipulated limits on monthly and annual aggregate of transactions and balance in such accounts are not breached, before a transaction is allowed to take place,” the notification said.