UIDAI has clearly stated that one can not open a bank account merely by presenting or submitting a physical Aadhaar Card or its photocopy. As per Prevention of Money-laundering (Maintenance of Records) Rules, 2005, and Reserve Bank of Indian circulars, a bank will go through a certain process of security checking. The process involves banks to perform verification through either biometric data or OTP authentication. Apart from this, there are another due diligence that need to be done by the bank before the Aadhaar Card can be accepted for banking transactions or KYC, says UIDAI. So as per the rules, no fraudster can open a bank account against your name using your Aadhaar Card details without verification through biometric or OTP.
However, if someone manages to open an account in a bank using your Aadhaar Card details without biometric or OTP authentication and other verification, then the bank will be held responsible for the loss, says UIDAI.
If you are still not sure about the security of your Aadhaar Card, then UIDAI provides another option for the verifiable 12-digit identification number. The Masked Aadhaar card is a viable option if you want to secure your Aadhaar Card details. While downloading Aadhaar Card details, you can opt for a more safer option of Masked Aadhaar card. This Masked Aadhaar Card only shows the last 4 digits of the 12-digit Aadhaar number. So, instead of carrying a phyiscal copy of your Aadhaar Card or a photocopy, it is advisable to have a Masked Aadhaar card, which in case of being misplaced or stolen is less likely to be misused. However, the Masked Aadhaar card does display other key details such as photograph, smart QR Code and demographic info.