The permanent account number (PAN) card will be the single way to establish anyone’s identity across the financial sector in India. The Ministry of Finance has suggested the use of PAN card, not the other card, as the sole way to establish identity for business.
According to the Finance ministry officials,
the idea is to suffix PAN with a two-digit code to indicate the financial transaction being undertaken. For example, PAN01 would indicate mutual funds transaction; PAN02 would indicate insurance transaction and so on for all product-specific know your customer (KYC) needs.
On the suggestion to make PAN as the sole identification card, which came straight from the Ministry of Finance, A.P. Kurian, chairman, Association of Mutual Funds in India (AMFI) said that Mutual fund identification number (MIN) has already been introduced for simplification of the process of KYC norms.
He further said;
We welcome the suggestion, but SEBI should tell us it clearly. To make the decision for adopting PAN as sole identification card is not in our hands. To institute PAN as the identification card, the orders need to be rolled out.
On the other hand, the SEBI disagrees on this matter. According to a SEBI official, it was AMFI’s initiative to come out with MIN and that Sebi had only asked for the enforcement of Prevention of Anti Money Laundering Act.
On the similar patter, the Employees’ Provident Fund Organisation (EPFO), also has distributed a social security number (SSN) for some of its subscribers. It is also not finding PAN good enough as sole identification card.
S.S. Dhankar, additional chief provident fund commissioner said that
we introduced SSN to simplify our operational hassles. Today people change jobs frequently. The major question is that how many people earning below Rs 6,500 per month have a PAN card.
However, the financial planners are speaking in favour of using one card to suffice all KYC norms for all financial transactions. As they face problems in using multiple cards for different transactions.