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How to Open Demat Account without Aadhaar Card?

06 Aug 2021 0 COMMENT

Introduction

Every brokerage firm or Depository Participant [DP] must adhere to the rules laid down by The Securities and Exchange Board of India (SEBI). One crucial guideline stated by SEBI is that every brokerage firm must link their clients' Demat accounts with their Aadhaar numbers.

The Income Tax Department has also laid down guidelines to make it compulsory for all investors except Nonresident Indians (NRIs) to link their PAN and Aadhaar with their Demat account.

Any Demat account not linked with Aadhaar by September 30, 2021, will be deactivated until the process is complete.

To avoid complications and closure of your Demat account, you will need to link your Aadhaar Card with the DP. It is simple to connect your Demat account in a few easy steps. The process is effortless and convenient and requires very few specific documents and important information. One such mandatory document is the Aadhaar Card. In fact, it is one of the two required documents needed to open your Demat account, the other one being your PAN Card.

Why is Aadhar mandatory to open a Demat account?

One of the main reasons for making the Aadhaar mandatory at the time when an investor plans to open a Demat Account is to deter money laundering and tax deception. The Aadhaar Card is vital proof authenticated by the Government of India. And given its validity and importance, it can stop misuse of funds and avoid corruption because it is a recognized identity and address proof document.

Additional Read: Documents Required To Open A Demat Account

How to open a Demat account?

To know how to open Demat account, it is important to look into the following steps:

  • Fill out the Demat account application form
  • Attach passport-sized photographs as required.
  • Submit mandatory documents for proof of address and identity: passport, PAN Card, Aadhaar Card etc. 
  • Submit proof of income: net worth statement, income tax returns etc.
  • Complete the in-person verification.
  • Get the approval on your account opening. 
  • Receive your login details comprising your account number and welcome kit through email.

How to know if your Demat account is linked with Aadhaar?

To check if your Demat account is linked with your Aadhaar Card, you will need to follow the steps mentioned below:

  • Visit the UIDAI site
  • Click on the 'Check Aadhaar-Linked account'
  • Key in your 12-digit Aadhaar number
  • You will receive an OTP sent to your registered mobile number
  • Enter the OTP in the empty field
  • View all your accounts, including your Demat account linked to your Aadhaar

Additional Read: How to link Aadhaar Card with Demat Account Online?

Advantages of linking Aadhaar with Demat Account:

  • Enables convenient monitoring for regulators and prevents fraud
  • Offers greater transparency in your investments.
  • Cuts down the stress of submitting additional documentation for futures and options trading.
  • Ensures swift eKYC approval on using your Aadhaar Card as all details are authenticated.

Conclusion

If you do not link your Aadhaar number with your Demat Account by September 30, 2021, it might get deactivated. To continue with your trading and investment activities from your Demat account, ensure that you complete this essential KYC norm — linking Aadhaar with your Demat account — at the earliest, without further delay.

FAQs:

    1.  Can one open a Demat account without an Aadhar Card?

As per the guidelines of SEBI, it is mandatory to link your Aadhar Card with your Demat account. Any account that is not linked to an Aadhar Card will be closed or deactivated automatically. This has been done to ensure better accountability and lower the risk of fraud. So, make sure to link your Aadhar Card with your Demat account as soon as possible.

    2.  How can I open a Demat account if my Aadhar Card is not linked with my mobile number?

If your Aadhar Card is not linked to your mobile number, you can visit the DP’s physical branch and open your Demat account offline. This may be a bit time-consuming compared to opening an account online. Besides, linking your mobile number to your Aadhar Card can simplify various procedures for you. So, it may be advisable to do so at the earliest. 

    3.  Is Aadhaar Card mandatory for Demat accounts?

Yes, as per the guidelines laid down by SEBI, you must link your Aadhar Card with your Demat account. SEBI has instructed all DPs to ask their clients to deactivate accounts where the Aadhar Card is not linked to the Demat account. So, make sure that you link the two. Otherwise, you may be stopped from buying and selling through your Demat account. 

   4.  Can a person have 2 Demat accounts with one Aadhaar Card?

There is no limitation on the number of Demat accounts you can have. One person can have multiple accounts as per their preference. However, each account must be linked to your Aadhar and Pan Card as per the rules of SEBI. Moreover, all your Demat accounts must be with different DPs. You cannot open more than one Demat and trading account with a single DP. But you may have multiple joint accounts. In this case, if you want to open more than one Demat account with the same DP, the other account holders must be different. So, for instance, if you have one joint account with a parent, the other can be with your spouse.

Disclaimer

ICICI Securities Ltd.( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Centre, H. T. Parekh Marg, Churchgate, Mumbai - 400020, India, Tel No : 022 - 2288 2460, 022 - 2288 2470. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. Investments in securities market are subject to market risks, read all the related documents carefully before investing. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents are solely for informational and educational purpose.