The government on Friday made Aadhaar mandatory to open new bank account and for financial transactions of Rs.50,000 and above.
All existing bank account holders have also been asked to link their Aadhaar number with their respective bank accounts by 31 December 2017.
The government's directive comes in the wake of a debate over Aadhaar and its 'mandatory' usages.
Earlier, the government had also made Aadhaar compulsory for filing income tax returns.
The government in Union Budget 2017 had already mandated seeding of Aadhaar number with Permanent Account Number to avoid individuals using multiple PANs to evade taxes.