Select capital market players allowed to use Aadhaar authentication of clients
1 min read 25 Apr 2020, 10:33 PM ISTThe decision follows a similar move earlier this month allowing 29 insurance companies to accept the Aadhaar number of their clients and carry out their authentication using the services of the UIDAI
PremiumThe revenue department has allowed nine capital market players including the Bombay Stock Exchange Ltd., the National Securities Depository Ltd., and the Central Depository Services (India) Ltd. to offer Aadhaar-based electronic ‘know your customer verification’ to clients.
The decision follows a similar move earlier this month allowing 29 insurance companies to accept the Aadhaar number of their clients and carry out their authentication using the services of the Unique Identification Authority of India (UIDAI). The Prevention of Money Laundering Act, 2002 allows such e-KYC verification using the facility provided by UIDAI.
An official statement said on Saturday quoting finance Secretary Ajay Bhushan Pandey that two notifications issued by the finance ministry allow these entities to use the Aadhaar authentication services with necessary standard security and privacy measures. This, Pandey said, would help these entities to perform e-KYC in real time, which would also reduce their cost of transactions.
“This would 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," the statement said quoting Pandey. Aadhaar authentication by insurance companies and the securities market entities have to be subject to the satisfaction of their regulatory authorities - the Insurance Regulatory and Development Authority of India (IRDA) and the Securities and Exchange Board of India (SEBI) respectively--that they comply with the standards of privacy and security as per the Aadhaar Act.
This would ease their KYC process and would reduce cost and time besides preventing money laundering activities, if any, the statement said. Aadhaar authentication is voluntary. If an investor uses Permanent Account Number, Aadhaar authentication is not needed.
CDSL Ventures Ltd., NSDL Database Management Ltd., NSE Data and Analytics Ltd., CAMS Investor Services Private Ltd. Computer Age Management Services Private Ltd., and Link Intime India Pvt. Ltd. are the other securities market entities that are allowed to do Aadhaar authentication, the statement said.
