IMPACT – MEDIUM
What is the change? India’s financial institutions are now linking bank accounts to Aadhaar cards.
What does the change mean? Foreign nationals who need banking services will be required to have an Aadhaar card.
- Implementation time frame: Immediate and ongoing.
- What is affected: Aadhaar cards, bank accounts.
- Who is affected: Foreign nationals who require banking services.
Background: Recently, Indian financial institutions have begun linking customers’ bank accounts to Aadhaar cards, which have a unique identity number issued by the Unique Identification Authority of India according to the card holder’s biometrics. This new requirement will affect foreign employees with Indian resident status (those staying more than 182 days), who will need to apply for Aadhaar cards and link them to their bank accounts. If foreign nationals fail to obtain Aadhaar cards, financial institutions may block the individual’s bank account. More information may be obtained on the UIDAI’s website. According to the Economic Times, a deadline of Dec. 31 has been set for linking accounts that were opened before Oct. 25. Aadhaar cards are also required for new accounts by telephone companies in India, and foreign nationals should note that various institutions and organizations throughout India are increasingly requiring the cards in order to open accounts or conduct routine tasks.
In April, authorities announced that Aadhaar Cards would be required by foreign nationals who stay in India for 182 days or more, to pay domestic taxes. In May, however, the government, changed course and said that foreign nationals could pay tax requirements with their permanent account number.
BAL Analysis: Foreign nationals should take note of the new requirement for linking bank accounts with Aadhaar cards and work with their financial institution to ensure that their banking activities are not impacted in the new year.