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Cabinet approves amendment for 3 laws for voluntary Aadhaar eKYC by banking and telcos

The Cabinet has approved the amendment of three laws – The Telegraph Act, Prevention of Money Laundering Act (PMLA) and the Aadhaar Act – to allow private bodies such as banks and telcos to allow Aadhaar as one of the ‘know your customer’ (KYC) methods, reports Hindustan Times.

This comes after the Supreme Court, in its judgement, struck down the provision of Aadhaar Act that allows private entities to use Aadhaar.

According to PTI, following are the proposed amendments:  

  • Allowing an opt-out option for children who have been enrolled in the Aadhaar scheme through their parents, upon attaining 18 years of age.
  • An offline verification through QR codes for an Aadhaar card holder; they may not be required to share the actual Aadhaar number.
  • Imprisonment of up to 10 years for attempting to hack Aadhaar data; currently, the punishment is 3 years.
  • Action against an individual held accountable for denying services for the want of Aadhaar.

In the proposed amendments, private entities using Aadhaar as a KYC document will have to ensure safety and privacy of Aadhaar data, reports The Indian Express. The Supreme Court in its September 26th judgement had upheld the validity of Aadhaar Act, however, limited the Aadhaar authentication for services, subsidy and benefits under Section 7 of the Act.

RTI, RBI, and eKYC

Last month, an RTI query revealed that the Reserve Bank of India (RBI) has not issued any updates to the eKYC norms for its regulated entities. The RBI has not clarified on the status of Aadhaar eSign nor has it indicated if micro ATMs will be allowed to use the Aadhaar Payments Bridge (APB) or Aadhaar Enabled Payments Systems (AePS).

Read our Aadhaar coverage here.

Edit: The headline had been updated to reflect the approval of the amendment, not the actual amendment as the previous one stated. The error is regretted. 

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