Cabinet has passed an ordinance that brings back the use of Aadhaar by private companies on a voluntary basis. The bill is in the context of the Supreme Court ruling on Aadhaar Act, where the ruling said that Aadhaar should be used only for government entities. It struck down the clause in Aadhaar Act that allowed Aadhaar to use by private firms including banks and telecom operators.
The Union Cabinet on Thursday endorsed the declaration of the ordinance that allows the voluntary use of Aadhaar as identity proof for opening bank accounts and getting mobile connections. The Aadhaar bill allows telecom companies and banks to use Aadhaar for KYC with the voluntary and informed consent of a customer. The ordinance notes that no person will be denied any service if he/she is unable or if he/she denies providing Aadhaar number.
The Union Cabinet on Thursday endorsed the declaration of the ordinance that allows the voluntary use of Aadhaar as identity proof for opening bank accounts and getting mobile connections. The Aadhaar bill allows telecom companies and banks to use Aadhaar for KYC with the voluntary and informed consent of a customer. The ordinance notes that no person will be denied any service if he/she is unable or if he/she denies providing Aadhaar number.
The amendment also imposes heavy fines in case of breaking of rules set for the use of Aadhaar and violation of privacy. It also bans service providers from collecting the biometric details or the 12-digit Aadhaar number of a person even in case he/she has freely offered the UID card for authentication. The amendment provides for a civil penalty of up to Rs 1 crore on entities that break the terms of the Aadhaar Act, with an additional fine of up to Rs 10 lakh per day in case of persistant non-compliance. Moreover, the illegal use of identity data by a requesting entity/offline verification entity would be punishable with jail term of up to three years with a penalty that may increase to Rs 10,000 or in case of a company with a fine of up to Rs 1 lakh.
The amendment establishes in clear terms that any individual refuses Aadhaar for verification cannot be denied of any service by the service providers like bank or telecom service providers. According to the proposed amendment, the entities who request for Aadhaar number for the KYC will have to inform the UID cardholder for the alternate means of verification and cannot deny the services in case the cardholder refuses to provide his UID card for the verification.
This ordinance is a great relief to organizations and customers alike. Without using Aadhaar, opening a bank account and taking new SIM cards had become a hassle. With this ordinance in place it will be more effectively carried out by using Aadhaar eKYC. The Aadhaar Amendment Bill does a commendable job of returning the advantages of Aadhaar while assuring compliance with the Supreme Court judgement.
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