India’s banks continue harassment on customers over Aadhaar.

Even as reports of leaks in India's biometric identity database, Aadhaar, spook those who'd like to keep their finances private, lenders and insurance companies are browbeating customers into linking their bank accounts with it.

In their zeal to meet the supreme court-designated March 31, 2018, deadline, the firms are either arbitrarily blocking accounts or disallowing the opening of new accounts without submission of the 12-digit unique identification number.

Confusion reigns

Tanya Jones (name changed), a 29-year-old Mumbai-based media professional, recently discovered that, without even informing her, the State Bank of India had changed the status of her public provident fund account to "stopped." Her account was re-activated by the country's largest lender only after she submitted her Aadhaar details.

"It was a harrowing experience, it was just a click of a button but it took five signatures from three different people at the branch and I had to spend a whole afternoon there," Jones told Quartz. "They should have had at least informed me about it via SMS or email."

An email questionnaire Quartz sent to SBI on the matter remains unanswered.

On Dec. 16, the supreme court of India extended the deadline to link bank accounts with Aadhaar by three months to March 31 this year. But banks are wary of waiting. "The problem is that if everyone starts coming in to get their Aadhaar linked in the last week of March, how do you expect banks to cope? Therefore, certain branches are trying to be better safe than sorry and doing it from now itself," a recently-retired public sector banker said, requesting anonymity.

However, customers' ordeal began long ago.

In August 2017, a Quartz India writer was denied the right to open an account with Kotak Mahindra Bank, four months before the then deadline of Dec. 31, 2017. Kotak admitted making Aadhaar mandatory before the due date.

Some bankers, though, dub these stray incidents. "The Indian Banks' Association (IBA) had sent out a notice to all the banks after the deadline was extended explaining that now they have to sick to the new deadline. So now banks are following the rule," said VG Kannan, chief executive officer of the IBA. "In some cases, it's possible that some small branches are not aware or this may happen in smaller cities, but we don't see it as a widespread problem."

Last month, Kannan told BloomberQuint that only 50% of the accounts had been liked to Aadhaar till that time.

Problem manifests

But then, the problem isn't restricted to banks alone.

Even insurance firms are now denying claims and stopping renewals in the absence of Aadhaar. Earlier this month,Cigna TTK reportedly refused cashless approval in one case.

Asmita Sengupta (name changed), a 33-year old New Delhi-based media professional was unable to access her insurance documents or renew the policy on the Life Insurance Corporation of India's website. In an emailed response to Quartz, LIC admitted the error, adding that it had been rectified. "No instructions have been given to our offices that policy services be stopped for non-submission of Aadhaar and PAN," an LIC official said in the mail.

"We are also hearing about these issues...But there is a lot of pressure on all these companies like LIC, which control a vast majority of the market. They need to act swiftly," said an official of another insurance company who did not wish to be identified.

The coercion may be uncalled for at this point given that Aadhaar's effectiveness is itself under a cloud as is being argued in the country's apex court.

In any case, the irony in mess can't be missed. Aadhaar was meant to help the government include millions of Indians usually left out of the financial system, besides eliminating bureaucratic hurdles. But forcing them into the programme has only made it more stressful and confusing for the very people it was supposed to benefit.