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Supreme Court Verdict Affecting Aadhaar for Bank KYC

25 Dec, 2019 Divesh Mishra

After the Supreme Court order of 26/09/18, under which it restricted authentication use of Aadhaar for private businesses. It then became quite complicated to understand whether Aadhaar is acceptable as a valid KYC proof or not. To be honest there is no equivalent of the Aadhaar Card issued by the Unique Identification Authority of India (UIDAI) as it is a complete and irrefutable identity proof of the person as the biometric identity of a person can never be replicated.

Now UIDAI has clarified to the banks that Aadhaar eKYC can be used as an authenticated measure for beneficiaries of subsidies and welfare schemes. Even the new accounts can be opened using Aadhaar verification if a customer says that it is needed for DBT (Direct Benefit Transfer). So, what about the other, normal customers? Yes, physical Aadhaar Card presentation as well as through QR (Quick Response) Code can be used for verifying the authenticity of these customers.

This also means Aadhaar enabled Payment System (AePS) and BHIMAadhaar Pay shall continue to remain as it is without any interruption. That the banks will continue to use Aadhaar if the customer provides it voluntarily.

This will also result in continuation by every schedule commercial bank (SCB) to provide Aadhaar enrolment service.