Thursday, May 13

Kotak’s 8/11 Aadhaar-based accounts take a hit, post-SC order

MUMBAI: Private sector leader Kotak Mahindra Bank Wednesday said it has stopped new account openings under a popular route that relied on a person’s Aadhar details.

The lender, however, said it has achieved its 18-month target of doubling the number of accounts to 16 million, courtesy the “8/11” offering which relied on the controversial biometric project.

Its joint managing director Dipak Gupta said the bank has stopped new account openings after the Supreme Court judgement that prevented private companies from using the biometrics-based e-KYC (know your customer) norms.

He conceded that it will impact the bank’s new account openings but added that the bank is working on two alternatives for account opening which are technology-powered.

Kotka Mahindra Bank was the first lender to launch the Aadhar-based account opening in March 2016, which was later adopted by many others.

The account used to be opened remotely by a customer without any physical visit to any of the bank’s over 1,400 branches. Gupta said over three fourths of the roughly 8 million new account openings during the past 18 months were through Aadhar linkages.

He said while the bank is not opening new accounts under the Aadhar-based authentication system, the existing ones will continue to operate as per the relevant regulations.

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