The Finance Ministry has notified 22 non-banking entities providing financial services with permission to use Aadhaar for customer verification, according to a report by the Indian Express. The 22 entities include Amazon Pay (India) Pvt Ltd, Aditya Birla Housing Finance Ltd, Tata Motors Finance Solution, IIFL Finance and Mahindra Rural Housing Finance Ltd. According to reports, these organisations are already reporting entities, defined as any banking, financial institution, intermediary or a person carrying out a designated business or profession under the Prevention of Money Laundering Act (PMLA). The move comes soon after the IT Ministry proposed amendments to the Aadhaar Authentication for Good Governance (Social Welfare, Innovation, Knowledge) Rules, 2020, allowing non-governmental entities to carry out Aadhaar authentication. On Section 11A of the PMLA: Under the PMLA, reporting entities are required to submit reports on cash transactions, counterfeit currency, non-profit organisations, suspicious transactions etc. The Ministry has allowed the 22 entities to verify clients by performing Aadhaar authentication under the Aadhaar Act for purposes outlined under section 11A of the PMLA, which allows for reporting entities (that are banking companies) to use Aadhaar for establishing the identity of clients under clause (a). Section 11A also provisions the Indian government to permit non-banking reporting entities to perform authentication under clause (a), provided they satisfy requirements under the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 (18 of 2016), and that the UIDAI must be consulted before any notification is issued regarding this. But, Section 11A specifies that if…
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Finance Ministry allows 22 private entities to use Aadhaar for verification, is it legal though?
The move comes soon after the IT Ministry proposed amendments to the Aadhaar Authentication for Good Governance (Social Welfare, Innovation, Knowledge) Rules, 2020
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