CA Sharad Jain

Need To Have A Policy Of One Person – Only One (Aadhar / PAN Based) Bank Account

BACKGROUND : Presently, in our country, there is no limit on number of accounts which a person / entity can have with banks / Post Offices. A person / entity can open, keep and operate numerous saving accounts, current accounts and many other type of deposit accounts in various branches of one or more banks and in post offices (P.O.s) . Further, they can also have many other separate accounts in the form of cash credit limits, Overdraft facilities etc.

In such a situation, in many cases numerous bank / P.O. accounts (in excess of genuine business / personal needs) may be opened and used for tax evasion and other unethical purposes etc. The above situation also has many other adverse implications in the form of increased administrative work etc.


MAJOR PROBLEMS : The various major problems associated are as under :

Undisclosed Transactions : The additional (undisclosed) accounts may be opened for the purpose of executing the transactions which are not intended to be recorded in the statutorily maintained books of accounts / disclosed to the tax and other regulatory authorities. This may result in tax evasion, generation of black money and other unethical practices.

Difficulty In Detection & Monitoring : The undisclosed accounts may be opened in different banks / P.O.s in different cities etc. Due to large number of accounts in entire banking industry & P.O.s , it is almost impossible for the regulatory authorities to detect all the bank accounts pertaining to any particular person and to monitor the transactions executed through those accounts.

Difficulty In Linking All The Bank Accounts Through Aadhar / PAN Etc. : Due to large no. of accounts in banking industry & P.O.s , it is almost impossible to link, monitor and analyze each and every bank account of every person / entity. Linking etc. of large number of accounts requires lot of manpower and resources which are not presently available.

Intentional Non Repayment Of Loans And Keeping Deposits In Other Bank / P.O. Accounts: Many people do not intentionally repay the loans taken from banks and then subsequently opens accounts in other banks and / or P.O. s to deposit their surplus funds and to execute their regular transactions.

Avoidance Of Tax Recovery : In many cases, when tax demand is raised, the person / entity withdraws the funds from his existing disclosed account and opens new account with other bank or P.O.s and deposit the funds therein and thus defeats the direct recovery of tax from the existing bank account.

Increased Administrative Work / Compliances Etc. : The additional accounts creates additional work burden, requires additional computer resources and manpower, consumes additional time of banks / P.O.s. Further, legal compliances etc. are also to be additionally made in respect of all such accounts.

Increased Dormant Accounts : The additional bank / P.O. accounts are used occasionally which results in large no. of Inoperative accounts. This affects smooth functioning of banking system and banks / P.O.s cannot utilize their valuable time in doing other useful functions.

Suggested Solution : To overcome all the above problems, it is suggested that :

(a) Each person / entity should have only one basic bank (including Post Office) account in the entire country.

(b) To ensure that no person / entity has more than one basic account, the account should be linked with aadhar (and additionally with PAN) of the individual person and with PAN in case of non individual.

(c) All the facilities (except no limit on number of accounts) which are presently available under banking system (including Post Office) should remain available under new system also.

(d) There should not be separate and independent saving account, current account, fixed deposit accounts etc. but all these present facilities should be available in the form of segments of the one basic bank account itself i.e., saving segment, current segment, fixed deposit segment, recurring deposit segment, cash credit facility segment, overdraft facility segment, term loan segment etc.

(e) The basic bank account should be opened and maintained by any central agency like RBI etc. but the segments should be opened, maintained and operated by the banks / bank branches.

(f) The different segments should be permissible to be opened with the same / different branches of a bank / P.O. or in one or more branches of other banks / P.O. e.g., saving segment with one bank branch and current segment with another bank branch or both in one bank branch etc.

(g) The segment should be capable of being transferred from one bank branch to the other branches of same / different bank / P.O. (to take care of any dissatisfaction of account holder with present bank / P.O. branch services or for account holder’s need or benefit etc.). It should also be capable of being closed and reopened in same / different bank / P.O. etc. as per need.

(h) Apart from the bank / P.O. branch, where the particular segment is opened, the account holder should be capable to deposit / withdraw money in his that segment from any other branch of the same bank or from the branchs of other banks / P.O. also (in appropriate cases i.e., saving, current , cash credit limit, overdraft limits etc. segments) (through use of advanced technologies).

(i) The saving segment should be restricted to be opened with only one bank / P.O. branch (as large no. of additional accounts in banking industry are from saving segment only). Similarly, the current account segment should also be restricted to be opened with only one bank branch.

(j) The fixed deposit, recurring deposit etc. segments should be permitted to be opened and kept with more than one bank branches / Post Offices (due to different interest rates / schemes etc. by different banks / P.O.s)

(k) The term loan, cash credit, overdraft etc. segments should be permitted to be opened and kept with more than one bank branch ( as the loan need of borrower may not be fulfilled by one bank branch / due to other needs of borrowers etc.)

(l) The central agency opening basic account should have details of all transactions in all segments in all the bank / P.O. branches. But, a particular bank / P.O. should not be able to view the details / transactions of the account holder in segments with other banks / P.O. (for privacy of other bank / P.O. business) . However, in case of defaulter borrower, the bank should have facility to obtain details of deposits of the borrower in segments with other banks / P.O.s, from the central agency and should also have facility to get transfer of such funds in defaulted loan account, under any predetermined legal process.

(m) The brief process may be that a person / entity desirous to open any segment with any bank / P.O. branch will go to that branch. The branch will get his / its basic account opened with the central agency. After that, the branch will open the desirous segment of the customer under that basic account. In case a customer already has a basic bank account then the branch will open the desirous segment (subject to restriction on number of saving etc. segments). The bank’s software will be linked with the software of the central agency through which the details of all the opening and closing / transfer of segment from one bank to other and all transactions etc. will be available with the central agency.

(n) Apart from above basic outline, a full proof system can be developed over a period of time based on difficulties, experiences etc.

BENEFITS OF SUGGESTED SYSTEM : In suggested system, the entire details of banking transactions of every person / entity will be available instantly at one place. The number of bank / P.O. accounts will get substantially reduced. This will facilitate monitoring of banking transactions of a person / entity, by the tax / other regulatory agencies. Further, it will not be possible for any person / entity to hide banking transactions. Ultimately, the tax evasion and black money will get reduced / ended. The administrative work burden / compliances and cost of banking will also get reduced. The released capacity of the bank can be utilized for valuable work. There may be reduction in NPA’s in banking system because it will not be possible for the defaulter borrower to simultaneously keep his funds in account with other banks. The tax recovery avoidance will also not be possible by shifting funds to other undisclosed accounts. This strategy will be much effective than alternative strategy of first permitting to have unlimited number of bank / P.O. accounts and then secondly trying to link them to aadhar / PAN only, as due to large no. of accounts in banking industry, it is almost impossible to link and analyze each and every account of every person.

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28 responses to “Need To Have A Policy of One Person – One Bank Account”

  1. sultan khan says:

    this is the big duffer thing how can we used only one account its a big deal it is directly loss by banks take sbi bank they are maintain 5000 thousand for minimum balance maintain abb india me gharibo ku lutre kutte salee harma ke pille

  2. Name says:

    When disclosures of bank A/c are there in IT returns, then no use of such policy.

  3. CA. N B Aradhya, Mysore says:


    I have sent this concept very Long Back to all the department head starting from President of India, PM. RBI Governer to Ministry of Finance.

    UNTILL AND UNLESS IF WE DONOT HAVE SUCH SYSTEM it is not implemented current situation is too horrible in maintaining multiple accounts. Pl visit my Face Book separate page..

  4. Adv.S.Prabhakar rao says:

    Mr.sharad jain suggestion to have one principal account controlled by RBI with different segments in different banks/branches with high portability is very practical and workable without sacrificing individual Bank’s or customers independence to have best utilisation of manpower resources etc. I fully endorse his plan. Similarly, instead of all Banks having separate ATMs, separate cooperative Institutions should come into existence, for exclusively managing ATMs, like the independent ones like TATAs etc. now already functioning, and just like Cos.exclusively for constructing & operating Mobile towers for different mobile/phone Cos. It is sheer waste of money, resources, mismanagement of many defunct nonworking mainly of SBI/ other Bank’s ATMs running on old outdated technology not coping with the new changing directions of daily/weekly withdrawal limits etc., what with new Rs.2000/Rs.500 notes & so on. Similarly, instead of different credit/debit cards for different Banks, a system of Universal Card should also be there for easy operation and to save on valuable resources.
    As a follow-up suggestion, for use within country,internally, a single Identity Card containing Passport No.instead of seaparate I-cards issued by UDAI /IT/ Election Commission/RTO wasting their manpower/money & other resources in having different ID cards printed for each of the citizens, why not date of birth(instead of present year of birth) with PAN/RTO registration(if anyone does not hold now, it can be left blank to be updated online later as n when available). The professional bodies/Bar Association etc. should press for immediate implementation of this suggestion(as it does not involve any major constitutional amendments etc.) the Central Govt.& its various bodies like UDAI/IT/ centrally connected RTOs closely monitored by Central Motor Transport Authority administering different State MV Rules(as Road transport is a state subject). If this ID card also containing reference no.of Passport(if taken) can also used as ATM card. So let us move the different governmental bodies involved for sorting out this problem of different multiple need based cards, which can simplify the entire Banking & working of several other governmental bodies causing extreme inconvenience to common man.

  5. CA ANUP R. SHIMPI says:

    Good Suggestion. I would like to add one more thing that there should be one bank account with adhar and pan link. All bank should act as a commission agent. No one have right on account of individual. Bank can only charge the charges what they given or provided services to the account holder. One can do transaction in any bank or institute those have a license from RBI.
    As far as defination of person considered in Income tax act can open only one account and do their transaction.
    A lot of suggestion is there but……………


    the regulatories have enough mechanisms and machinery to detect any type of transactions

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