Centre widens scope for voluntary Aadhaar-based authentication1 min read . Updated: 26 Apr 2020, 11:24 PM IST
Earlier in the month, the Centre allowed 29 insurance companies to accept Aadhaar numbers of clients for authentication using the services of UIDAI
Soon after allowing 29 insurance companies to adopt Aadhaar-based authentication for know-your-customer (KYC) verifications, the Centre extended the scope of voluntary biometric authentication to nine financial market entities.
The revenue department said capital market entities allowed to use Aadhaar-based authentication include BSE Ltd, National Securities Depository Ltd and Central Depository Services (India) Ltd.
Earlier in the month, the Centre allowed 29 insurance companies to accept Aadhaar numbers of clients for authentication using the services of the Unique Identification Authority of India (UIDAI). The Prevention of Money Laundering Act, 2002, allows such e-KYC verifications using the facility provided by the UIDAI.
Two notifications issued by the finance ministry allow these entities to use the Aadhaar authentication services with necessary standard security and privacy measures, the department said in statement, citing finance secretary Ajay Bhushan Pandey.
“This would help these entities to perform e-KYC in real time, which would also reduce their cost of transactions," Pandey said. “This will also be beneficial to the customers or the investors, especially small and retail investors, as they need not submit physical papers or documents for KYC."
Aadhaar authentication by insurance companies and securities market entities have to be subject to the satisfaction of the Insurance Regulatory and Development Authority of India (Irda) and the Securities and Exchange Board of India (Sebi), respectively, and must comply with the privacy and security standards, according to the Aadhaar Act. CDSL Ventures Ltd, NSDL Database Management Ltd, NSE Data and Analytics Ltd, CAMS Investor Services Private Ltd, Computer Age Management Services Pvt Ltd, and Link Intime India Pvt. Ltd are the other entities that are can perform Aadhaar-based authentication.
Last year, Parliament approved amendments to three laws—Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016, Indian Telegraph Act, 1885 and the Prevention of Money-laundering Act, 2002—to enable the Centre’s decision for use of Aadhaar for fulfilling KYC norms.