"Following unearthing of alleged frauds in PNB and a few other banks, the public sector banks (PSBs) are anyway fire-fighting to protect their core business and are hard pressed for human and other resources, to take up the job of Aadhaar linkage. Should we not give them more time?" it said.
(Also read: What UIDAI Said On Sharing Of Aadhaar Card Number)
"Besides, the customers are also facing deadline pressure not only from the banks but also from payment gateways companies, which may also see a lot of disruption in the run-up to the deadline."
Noting that the economy has just about come out of the impact of the "vastly structural jerks" of demonetisation and the Goods and Services Tax (GST), Assocham said the country is not ready for another challenge by way of "any bank account becoming inoperative after March 31."
"As of now, even those having submitted Aadhaar details are getting KYC (Know Your Customer) reminders," it said.
"There is a lot of confusion which may lead to further problems as we approach the deadline. Banking and online operations, including the trading by retail stock investors, are the lifeline of the economy which is set to march ahead in the next fiscal. Thus we need to tread very cautiously," said Assocham Secretary General D S Rawat.
The industry body said the PSBs are smarting under the alleged frauds running into thousands of crores of rupees even as the pressure of non-performing assets (NPAs), or bad loans, is increasing by the day.
"It is best advised that the banks be allowed to come out of the crisis-like situation before they are given the additional task of Aadhaar seeding to customer accounts," it added.
Besides PNB, several other government-owned banks, including Bank of Baroda, Oriental Bank of Commerce and Corporation Bank, have reported fraud in recent times.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)