Government to overhaul the process of linking Aadhaar with DBT accounts

The cabinet secretariat meeting held last week has asked banks to temporarily halt the current process for next ten days till their core banking software was amended to adopt the new system


The government has decided to overhaul the process that is presently followed to link Direct Benefit Transfer (DBT) accounts in banks with Aadhaar card. A decision has also been made to temporarily halt the current provision that is followed to overwrite existing subsidy-linked accounts with new Aadhaar-linked accounts.

As per a report in The Economic Times, the cabinet secretariat meeting held last week has asked banks to temporarily halt the current process for next ten days till their core banking software was amended to adopt the new system.

The new decision comes against the backdrop of recent allegations that emerged against Bharti Airtel for misusing Aadhaar cards of its customers. The telecom firm had used the electronic know your customer (e-KYC) verification data of its customers to open bank accounts without informing or taking consent from them.

These accounts, that were started on its payments bank, were later turned into accounts to which all subsidy payments, including cooking gas subsidies of close to 50 lakh customers that totaled around Rs 167 crore were directed to.

In response to this, the Unique Identification Authority of India (UIDAI) had temporarily barred Bharti Airtel and its payments bank from using Aadhaar linking for mobile verification or opening new accounts.

This has also highlighted the existing loopholes in the system that need an urgent overhaul prompting the officials to take action.

“We believe that it will stem some of the over-enthusiasm by companies to make their own accounts as primary accounts for receiving government subsidy without the explicit consent of the customer,” an official with the DBT mission was quoted saying in the report.

These new reformations will include steps to ensure that customer consent will be taken before any action is taken in relation to the subsidy accounts including changes in accounts selected to get subsidies.