How will Aadhaar control money laundering, asks SC

FPJ Bureau | Updated on: Wednesday, May 29, 2019, 10:50 PM IST


New Delhi : How can Aadhaar curb the menace of money laundering which poses a threat to the economy, the Supreme Court asked the Centre on Wednesday.

A five judge constitution bench headed by Chief Justice Dipak Misra, hearing petitions challenging the validity of Aadhaar and its enabling 2016 law for the 27th day, posed the question after it was told by the Unique Identification Authority of India (UIDAI) that the menace of hawala transactions and money laundering were a global concern and the 12-digit unique identifier would help in curbing them.

The government also claimed that the authorities have been able to unearth Rs 33,000 crore, which was earlier not taxed, through the “voluntary seeding” of Aadhaar with PAN cards and the amount may rise “exponentially” if this linking is made mandatory.


It also submitted that linking Aadhaar number with PAN would prevent income tax evasion, circulation and use of black money, besides the practice will also eliminate duplication of PAN numbers, which are used for the purpose of tax evasion.

In response, the bench, which also comprised justices A K Sikri, A M Khanwilkar, D Y Chandrachud and Ashok Bhushan, said “there is no doubt that money laundering is a problem. The only question that needs to be answered is how will Aadhaar prevent money laundering.”

Additional Solicitor General Tushar Mehta, appearing for UIDAI, said that seeding of Aadhaar with PAN card and bank accounts and other facilities would help authorities in effectively dealing with the global threat of money laundering.


He said now the banks are mandated to verify the identity of their customers and the Prevention of Money Laundering Act (PMLA) is no more a “toothless law” after it has been strengthened.

The PMLA has become stringent since 2013 and the amended rules under PMLA mandates provision of Aadhaar number to open a bank account, he said.

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Published on: Thursday, April 12, 2018, 12:18 AM IST