The Central government and the Reserve Bank of India (RBI) are in talks to allow the use of Aadhaar QR codes, instead of biometric eKYC for opening bank accounts, operating payment wallets and purchasing insurance covers reports The Economic Times.

The Supreme Court held that Aadhaar would be mandatory for availing the benefits of social welfare schemes which has led to a discussion on the use of ‘offline Aadhaar’.

According to the report

  • The QR codes are “digitally signed by the UIDAI making it a reliable” document.
  • The UIDAI has been pushing offline Aadhaar as the tool for KYC.
  • QR codes have been offered as a secure solution as they help mask details beyond the name, photograph and address which are readily available and needed for establishing a person’s ID.
  • The RBI has had two-three rounds of discussions with the UIDAI to facilitate the use of offline Aadhaar by banks. The UIDAI has suggested the RBI to amend the KYC master circular to ensure that rules are in sync with the SC order.

MediaNama has reached out to the UIDAI for a comment and will update the story when we hear from them.

Srinivas Kodali, an independent security researcher, told MediaNama that the UIDAI is trying to re-invent Aadhaar post the privacy and Aadhaar judgement by Supreme Court. “The Aadhaar Act needs to be amended to include all new systems being developed by the UIDAI,” he explained. He added that the UIDAI is lobbying the RBI to ensure that Aadhaar survives the Supreme Court judgement, but in a way is pushing for contempt of court. “By asking RBI to interpret the law in a particular way, the UIDAI is suggesting that Aadhaar be used in banks through a circular. This would lead to contempt of SC order,” he added.

Banks and Aadhaar

In its September 26 judgement on Aadhaar, SC held that private companies such as banks could not demand Aadhaar card for providing services. Legal expert, L Badri Narayanan, told the Financial Express that even in case of a customer willing or consenting to use Aadhaar card, it can only be used as an ID or address proof like other documents. It cannot be used for biometric verification or e-KYC. Still, even after two months of SC’s judgement, RBI is yet to issue a notification to prevent Aadhaar eKYC by private banks.