Yes Bank Ordered to Pay Rs.50,000 Compensation for Denying Account Without Aadhaar

The Bombay High Court has directed Yes Bank to pay ₹50,000 as compensation to a Mumbai-based company for refusing to open a bank account just because the company did not have an Aadhaar card. The Court said the bank’s action was wrong, especially since the Supreme Court had already ruled that Aadhaar is not mandatory for opening bank accounts.

Background of the Case

The issue began in January 2018 when a company named Microfibres Pvt Ltd. approached Yes Bank to open a current account. However, the bank told the company that it could not open the account without an Aadhaar card.

Later, in April 2018, the bank gave the same response in writing—even though the Supreme Court had already issued interim orders saying that Aadhaar should not be mandatory for opening bank accounts. Eventually, on 26th September 2018, the Supreme Court gave its final judgment, clearly stating that no one can be forced to provide Aadhaar for bank accounts.

The company told the court that because of not having a bank account, it could not rent out its commercial property in Mumbai for over a year. This caused financial hardship to the family of the company’s founder-director, who had passed away. His widow and unmarried daughter were depending on the rental income from the property, which was around ₹1.5 lakh per month.

The company had initially asked for ₹10 lakh in compensation, claiming a full year of lost rent.

What the Court Said

The case was heard by Justice M.S. Sonak and Justice Jitendra Jain, who said that Yes Bank had no reason to deny the bank account after 26 September 2018, when the Aadhaar rule was officially struck down.

The judges also noted that the bank had been given a chance to respond to the compensation claim back in 2018 but did not reply. While the court said the ₹10 lakh compensation claim was too high, it agreed that the company deserved some relief.

Court’s Decision

Because of the special circumstances of the case, the court said it would not ask the company to go through other legal processes and directly ordered Yes Bank to pay ₹50,000 as compensation.

The bank has been asked to pay the amount within eight weeks. This case serves as a reminder that banks must follow the law and cannot insist on Aadhaar when it is not required.

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