Using Aadhaar in banking cannot help check fraud, the Supreme Court said on Thursday, adding that bank officials are seemingly hand-in-glove with fraudsters, ANI reported.

Attorney General KK Venugopal had told the court that the biometric system can help check all bank frauds, News18 reported.

“The bank knows to whom it is giving a loan, and it is the bank officials who are hand-in-glove with fraudsters,” the bench said. “Aadhaar can do little to stop it...We can understand when you talk about frauds in welfare schemes, but in case of bank frauds, we don’t see what Aadhaar can do.”

A five-judge Constitution bench of the Supreme Court made the observation while hearing a batch of petitions that challenge the constitutional validity of the government’s Aadhaar programme and its enabling law. The petitioners have raised privacy concerns and have also questioned why the identity number has been made mandatory for people to avail of welfare schemes, file income tax returns, and hold mobile numbers and bank accounts.

The court’s observation on banking fraud came even as investigating agencies look into multiple scams in the banking sector that have come to light in recent weeks, most notably the one involving jeweller Nirav Modi and the Punjab National Bank.

At the hearing on Wednesday, the court had pointed out that the Aadhaar legislation was “too open-ended” and gave excessive power to the Unique Identification Authority of India.