From the very beginning, the Narendra Modi government hit the pedal to the floor when it came to establishing new and untouched heights of financial transparency and accountability. Be it the unwavering and unflagging commitment of the government to root out black money or the effort to provide banking to all by linking these services to Aadhaar, the BJP government has left no stone unturned in ensuring that the twin evils of corruption and pilferage of government funds are stopped dead in its tracks.
Another initiative under this wide banner comes in the form of the recent directive by the Securities and Exchange Board of India (SEBI). The stock exchanges have been asked to apprise the market regulator on the preparedness of the brokers to have their client submit their Aadhaar IDs before December 31. This move was inevitable in the scheme of things. Once the bank accounts of citizens are linked to Aadhaar, asking them to link their demat accounts naturally follows.
What’s more, citizens who have been conducting transactions in the market with utmost probity and above-board business practices have nothing to fear. Once implemented, the links with Aadhaar will help smoke out brokers and clients who channel illegitimately-earned money into the markets — either to make a killing on the back of inside information or to transfer the wealth to shell companies and consequently avoid tax liabilities. Obviously, change is painful. There already are murmurs from the brokers’ domain complaining that many customers won’t be willing to come on board or won’t proactively submit their Aadhaar cards. This is bunkum. The retail investor is more than keen to secure his investments, and if it involves submitting an Aadhaar ID, it is little sweat off his brow to submit the same.
The real reason many brokers are bemoaning this initiative is because it adds to their cost burden. Irrespective of how inconvenient the exercise may be, it is essential to weed out the few who use the markets for their nefarious ends. With the Aadhaar matrix in place, an intelligent framework will be standing on its feet that will help link shady investments and transactions back to the market participant. Essentially, even the PAN is supposed to serve the same purpose, but it has been vitiated given that myriads of fake PANs and counterfeit demat accounts are the norm in the market. Once this additional parameter of linking Aadhaar accounts with PAN and bank accounts take off, a prodigious chunk of the underhand dealing will be quelled.
