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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  1. Adil says:

    With due respect this idea seems to be autocratic. There should be transparency regarding how much cash one person has in N numbers of account. All accounts should be linked to adhar PAN etc.
    Because if one bank defaults there is other bank account you havr. Remember PMC.

  2. 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

  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……………

  6. ca sharad jain says:

    @ Shri T. Rajagopalan ji – Sir, under suggested scheme, one can make desired number of fixed deposit with many banks. What I am trying to say is that there will be One principal bank account with RBI and deposit with each and every bank branch will be under that main account only. Thus, there will be no reduction in present banking facilities available to the peoples but there will be very strong control on unaccounted accounts, dormant accounts etc.
    Regarding second problem that if location of the person is changed then the person can shift saving account from one branch to other. If he do not wish to do so then also he can deposit and withdraw money from that bank account from his new location through other bank branches (through advance technologies).
    The suggestion is only that do not let peoples to open numerous number of hidden accounts. but permit them to open one saving account, one current account, desired number of recurring deposit, fixed deposit and loan accounts with different banks but they should be within one folder so that there is very much strong control remains thereon. People may not open numerous saving accounts casually without sinceority to make tax evasion, unethical practices.

    1. Sathe says:

      I shall like to do the same One postal and one bank at one branch. When this Rs 100,000 insurance limit for one bank will be no upper limit. + when bank in case any problem cannot give my money back( Strike etc Some one comes to me and gives my money back (technical word I do not know) . Sometimes it does happen one bank/branch server chalata nahi Dusare bank/branch ka chalata hai Udhar jao says bank staff We go there do our transcation.First solve these practical problems then come out with such eutopian ideas. You are seeing demonetisation effect today( O that’s temporarily- Tell that to a person stranded as he has only one Rs 2000 note and no Auto Taxi accepting that to take him to his destination

  7. T. Rajagopalan says:

    Individuals are protected under the Deposits Protection Insurance only to a very limited extent (Rs 1 Lac I guess?). So, should we keep all our deposits and hard earned income in the same bank account and not spread our risks? (all eggs in one basket). Also if a person shifts job o a new location where another bank is more conveniently located for logistical purposes, should one be prohibited from opening account there without closing his account in his home town?

  8. ca sharad jain says:

    @ashishji, @ rasiks ji, @rupji, @nani gopal ji – actually, the answer to all your concerns have been given by me in response to queries by other queriests. Please view the same. As a summary I say that – (a) the concept is that there will be one principal account (like a folder) and under that folder various accounts with various banks can be opened like we can do in present. There is no suggestion for only one bank account. The person can have one saving account, one current account, many overdraft / cash credit limit / term loan accounts, may recurring deposit accounts, many fixed deposit accounts. The concept is to open one principal bank account with RBI and then open subsequent account within that main account with different banks. in such situation there will be no effect on present level of services we get, present interest benefits we get. This system is given preference over first permitting different saving accounts and then link them because linking is “detective strategy” and the suggested strategy is “preventive”. Preventive strategy is always better than detective strategy. When all accounts will be opened under one folder it will be better control.

  9. ca sharad jain says:

    @ pankaj sibal- sir, banking services will not hamper because the person can have many accounts with many banks but as a segment of one principal control account. The emphasis is only to keep all accounts with in one folder and not to limit no of accounts. Regarding saving account limit is suggested because mainly dormant accounts in banking industry are only saving accounts. Even if the no. of saving accounts are not limited, the purpose of controlling tax evasion will be served because all saving accounts will be within the folder of principal account.

  10. ca sharad jain says:

    @k r dhayal – Sir, there is no issue of interest rate. in the suggested system, a person can make fixed deposit with many banks as per interest rate benefit. but all fixed deposits will be with in one folder with rbi for control purposes only. no loss of interest or any present banking service.
    the issue is only regarding one saving account. peoples desirous of earning generally do not keep much money in saving account therefore, this issue is also not there. even if there is any interest issue on saving, the saving account will be portable to other bank branches.

  11. ca sharad jain says:

    @ abhishek. Sir, the emphasis is on “preventive measure” by putting all the bank accounts within one folder without affecting all other facilities which are being enjoyed presently. There is no suggestion to limit the number of bank accounts (except saving as their large no. are hampering banking system)

    It is so because Firstly, permitting unlimited number of accounts and then finding them is a “detective measure”. Preventive measures are always better than detective measures.

  12. ca sharad jain says:

    @suresh babu- under the proposed system there will be a one principal account (like a folder) in which a person can open sub accounts with different banks (like files in folders). Means one principal account with RBI and then various bank accounts with different bank branches. Thus, if fact there are numerous account but with in one folder so that they are automatically disclosed. No tracking and detecting activities are to be done.

    fixed deposit, recurring deposit and other type of deposit accounts can be opened in various banks as per interest benefits.Only saving account and current account shall be only in one bank branch because mainly numerous saving accounts by a single person are hampering banking system and are also means for tax evasion etc. The same is position as to the current accounts.
    Thus, saving for different purposes and loan for different purposes will not be affected. Different interest rates (except for saving account) can also be enjoyed on fixed deposit. In case of interest issue of saving bank also, portability will be there. In case of issue of service by branch, the option of deposit and withdrawal through other branches will be permissible (through advanced technologies). This will only limit number of saving and current accounts and all other existing facilities will remain. The person will not be able to go out of folder account and very strong control will be there than as is in present.

    Say even if more than one saving account is permitted then also that will be with in the folder of one principal account. Then also the purpose of control on tax evasion will get served only the purpose of reducing the burden on banking system will remain.

  13. ca sharad jain says:

    @jhalak jain- under the proposed system there will be a principal account (like a folder) in which a person can open sub accounts with different banks (like files in folders). Only saving account and current account shall be only in one bank branch. but loans and fixed deposits will be possible to be get from various branches. In case of interest issue of saving bank, portability will be there. In case of issue of service by branch, the option of deposit and withdrawal through other branches will be permissible (through advanced technologies). This will only limit number of saving and current accounts and all other existing facilities will remain. The person will not be able to go out of folder account and very strong control will be there than as is in present.

  14. Jhalak Jain says:

    One bank one account is possible only if all the banks are having same interest rates and charges which is not possible in current scenario. If one bank one account applicable in future then people would prefer to go in bank whose interest is low and in that case monopoly occurs and then this would hamper the business of other banks.

  15. A.Suresh babu says:

    Where is the need when all accounts are linked based on PAN. People open accounts based on convenience for operations etc. It is not correct to say an individual should have only one account. With my experience of working in a bank I saw people opening accounts in different banks because of certain facilities and ease of doing transactions. Not all financial institutions give same quality of service to the customers.

  16. TANAY NASKAR says:


  17. KR DHAYAL says:

    This idea is not possible, because all banks is having interest rates are deferrent. Interest rate and other loan policy of all banks should be same.

  18. PANKAJ SIBAL says:

    In such a scenario, the bank services will fall under essential services, bank staff cannot and should not be allowed to go on a single days strike even, like Defense and para military forces since the economy is now a backbone of the civilized society.

  19. Ashish says:

    The idea is good but only on paper. Highly difficult to implement. Saying that multiple bank account can not be tracked by IT officials is baseless. Another point put by author is that it will lower down the admin work of bank, But merely for lowering down of administration work one can not say no to a customer, Banks are doing business and they are always eager to invite new customers.
    Single bank accounts will prove to be big problem for those who move from one place to another for their earnings. It will be a curse for them to plan their homes based on the branch locations as they have to transact from one bank only.
    Instead of putting stop on black money, it would rather create a tendency to hold cash, not taking it to the bank as it is creating a huge accumulation in single unit of account, and resultingly people will take much interest and found little convenience also to spend cash for lot of transactions.
    One bank account will also be the problem for corporates paying salaries and employees as mapping a variety of different bank accounts in payroll disbursement may open scope for lags and delays.

    In my opinion this is impractical in the real world and instead of the benefits it will have only adverse impacts.

    Thanks and regard

  20. Rasik Dagli says:

    This statement is made without thinking about its consequences. If more than one Bank account is not allowed, it will result in malpractices by bank. Banks may lower FD Interest rates , May increase various service charges, may charge heavily for new cheque books etc. All bank accounts are linked with PAN Cards and/or Aaddhar Card and there is no possibility of hiding any transaction.

  21. Rup says:

    Practically not possible. Instead of that Government make compulsory to link Adhar / PAN card for all accounts and Centralize the database. Run analytics on PAN/Adhar . You will get all info.

    1. Sam says:

      In the current scheme of things, this is happening and high value are being looked into. It is all a software programing management. When Got would want every transaction to be screened, it can do so with better algorithms coming in from the massive inputs and data being collected by analyst working round the clock. Perhaps your (@Sharad Jain), thoughts and ideas were relevant upto about a year ago. If it was suggested / recommended 30 yrs ago, it was still not practical, but the govt of the day would never had taken your suggestion. Like someone said, have one bank, no competition, no govt PSUs, no Private banks, no competition, but a monster of a PSU, like SBI bursting out of seams would appear has the most mismanaged place in the country. Trust me, there would then be localised policies required by each branch to meet the needs of people. Also, all the buildings presently existing on a street ( for e.g.), will have to be centralised into a massive building where parking, entry exit and high security and emergency systems will need to be installed. The rush to such places would be more than those on railway stations or bus stands. We see examples of centralised systems at consumer/retail levels. Some banks just do not seem to manage the crowds. Perhaps what Sharad wants to say is something else which he has not been able to explan. From what he has explained, it is alien to the system of financial system. RBI is not supposed to get into banking competition. It is required to have a series of charted duties and responsibilities a Federal Bank is required to do, none of which is done by retail banks and vice-versa. I am not a finance man, but i see this recommendation was a complete misfired unguided diwali rocket. I have more than one account. All my accounts are with Aadhaar and PAN linked and appear in the IT returns. It is important that one must understand the system govt is following or a system that is essential for each one of us to adhere to as citizens (I obviously mean good citizens). For those who had been rocking the boat and brought you and me to near capsized state, are going to be caught up with. Rest assured, the more one has different bank accounts, the easier it is to catch. Take it from me, or sit with a professional in banking, atleast a GM, and understand why govt will never want anyone to get caught with one bank and sink his hard earned money. They are not sitting up there to play havoc with our money and bring out ideas like these . They have no control on a bank’s investments policies, even if they are PSUs, forget the private. They can look over the shoulder of them all to see the daily business is within policy and rules framework and a step beyond that, which is beyond banking (that is security evaluation), is closely followed up, a task undertaken with help from different related ministries.
      Nani Gopal Manna and almost all on this thread have voiced to explain to Sharad Jain why he has probably got the plot out of place and context.

  22. Venkatesh says:

    This is a baseless analysis done by the author of this article. Currently all bank accounts are linked to their PAN number and if a person holds more than one bank account, all his accounts can be consolidated to his PAN which is not a big task for the IT officials. Moreover people have the practice of segregating money for various types of expenses like – Savings, Investment in tax saving instruments, Children’s education, etc. All these were done using cash until now (with exceptions of people having different bank accounts for these). With the demonetisation move people have come to the realisation that they should start holding this money in different bank accounts and not have it in the form of cash. This will require each person to hold more than one bank account.

  23. Nani Gopal Manna says:

    Definitely it is a very good idea. But then the business of banks will hamper as a whole. As an alternative the aadhar card & the PAN card can become helpful in linking the accounts of a person in various banks & assessing the transactions. Action can be taken on the basis of that.

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