Friday, January 25, 2019

Parliament amends Aadhaar Act to aid legitimate use of Aadhaar by private companies

With the amendment of Aadhaar Act, the Indian government is ensuring the continued use of Aadhaar by private banking and telecom companies in accordance with the Supreme Court ruling which upheld the legal validity of Aadhaar. To this end, the government has proposed a series of amendments to the Aadhaar Targeted Delivery of Financial and Other Subsidies, Benefits and Services Act of 2016, the Telegraph Act of 1885 & the Prevention of Money Laundering Act of 2002.           
Here are some of the significant changes the Aadhaar and Other Laws Amendment Bill, 2018 is meant to bring about.

Telegraph Act

In its judgment, Supreme Court struck down Section 57 of the Aadhaar Act. It was from this section of the Aadhaar act that telecom operators obtained their powers to authenticate mobile numbers using the unique Aadhaar identification number. The court, but, did say that if a person willingly wants to use Aadhaar as an identity document, there may not be a problem. The meaning of “telegraph” covers mobile services since they include transmission and reception of signals. The amendment to the Telegraph Act makes Aadhaar-based identification voluntary and prevents the storage of either the Aadhaar number or the biometric data linked to it.

The Prevention of Money Laundering Act

The Telegraph Act amendment is repeated as Section 11A in the Prevention of Money Laundering Act, allowing banking firms to use Aadhaar on a voluntary basis. However, it does not limit with banking services. A clause in Section 11A allows any “reporting entity” to use Aadhaar if it complies with the Aadhaar Act. The Aadhaar services can now be used by anyone reported by the government to be coming under the Prevention of Money Laundering Act. Aadhaar services can be utilized for land records also. 

The amendment to both the Telegraph Act & the Money Laundering Act, still, make it obvious that a service cannot be refused for lack of Aadhaar.  The Aadhaar and Other Laws (Amendment) Bill 2018, prevents collecting of core biometric data as well as Aadhaar number by service providers in cases where people have willingly allowed the use of national ID as a factor of authentication. It also makes it clear that anyone not submitting Aadhaar cannot be refused any service, be it a bank account or a SIM card.

The legislation allows telecom service providers, aside from using Aadhaar for authentication, to leverage off-line Aadhaar verification, use of a passport, or any other officially authentic document as methods of identification.

For more information on how to implement Aadhaar eSign in your organization please contact us.

We, Finahub, are experts in Aadhaar related products and services like eSign, eKYC, Authentication etc. If you want to know how your enterprise can start using it, please give us a call  @ 0484 2388285 or email us at [email protected]