India will amend laws to allow voluntary submission of citizens’ biometric Aadhaar ID to private companies

(Image Credit- IANS)
  • India will modify the Telegraph Act and the Prevention of Money Laundering Act (PMLA) that will allow people to link their Aadhaar with their bank account and mobile number voluntarily.
  • A proposal from India’s Ministry of Electronics and Information Technology has received the approval from PM Narendra Modi.
  • Through a ‘virtual’ ID, private companies--banks and telecom companies-- will be able to access the biometric data.
Just months after India’s Supreme Court prohibited private companies from asking customers their Aadhaar data for authentication, the Indian government has approved changes in two key laws that will make legal the voluntary submission of Aadhaar.

The Indian government is amending the Telegraph Act and the Prevention of Money Laundering Act (PMLA), to include Aadhaar in the e-KYC options under the Telegraph Act. Similarly, it will allow people to link their Aadhaar and bank accounts for KYC, but on a voluntary basis under the PMLA act.

The Ministry of Electronics and Information Technology had recently floated a proposal to recognize a “virtual ID” so people will not have to disclose their original Aadhaar number.

The authentication through Aadhaar will be permissible for mobile phone SIM cards and obtaining new bank accounts, IANS reported citing a government source.

“But this shall not be the only option. Apart from Aadhaar KYC, passport and any other document the government may notify can also be used," said the source.

Earlier this year, the Supreme Court of India revoked the rights of all private companies to access Aadhaar database for authentication. The order to de-link the Aadhaar database from e-KYC came as a major setback for telecom operators and banks in India that had come to rely on Aadhaar data to fulfill regulatory requirements such as “Know Your Customer” and increasing their customer acquisition costs.

The proposed amendments are aimed at providing the necessary legal safety that will help the government to detect cases of money laundering, ET reported citing government officials.

India has also decided to give a parallel platform for digital authentication which has been named as "offline verification" through which authentication can be done by using QR code.

In addition, children’s Aadhaar data use will require parental consent.

Since the Supreme Court ban, the number of Aadhaar-related authentications fell by nearly a third to 824 million in November compared to March this year. Additionally, Aadhaar-based authentication through e-KYC —using fingerprints or iris —fell by nearly half to nearly 154 million in November from 370 million in March, Economic Times reported.

With IANS inputs

See also:

India’s unique identification program Aadhaar sees a big drop in ‘authentication’ use after Supreme Court verdict

The Aadhaar ID programme is here to stay but with some modifications