By Elton Gomes
The Cabinet, on Monday, approved amendments seeking legal support for sharing of Aadhaar information for new mobile numbers and opening bank accounts,sources said.
The Cabinet approved amendments to the Telegraph Act and the Prevention of Money Laundering Act (PMLA) after a Supreme Court judgment in September restricted private companies from using Aadhaar information.
Sources told PTI that the two Acts will be amended, and users will have the option of voluntary sharing of their 12-digit identification number for obtaining new mobile phone connections and for opening of bank accounts.
The key change will enable the Aadhaar holder to refuse to share details for opening a bank account or getting a cellphone SIM card.Earlier, it was mandatory to provide Aadhaar details for a host of services and welfare measures.
The law is also likely to be amended further to protect personal data and ensure the privacy of the Aadhaar holder. Aadhaar issuing authority, UIDAI, will be converted into an independent authority and will have powers to penalise those who demand Aadhaar details without approval.
Other proposed amendments include specific provision for allowing use of virtual IDs, QR (Quick response) code, and offline verification modes. Users above the age of 18 could also be given the option for opting out of an Aadhaar database.
SC struck down Section 57
On September 26, the Supreme Court, in its verdict, had struck down Section 57 of the Aadhaar Act. Section 57 made seeding of the biometric ID with SIMs and bank accounts compulsory. The Supreme Court ruled that Section 57 does not have any legal backing. To overcome this gap, the Telegraph Act is being amended so that legal backing can be provided for obtaining new mobile SIMs through Aadhaar.
Similarly, the amendment to the PMLA will give users the option to link their bank accounts to Aadhaar in the KYC option.
Companies to be fined for violating Aadhaar norms
It is said that the UIDAI could assume a regulatory role with enhanced power to take enforcement actions on the misuse of the 12-digit biometric Aadhaar ID. The Aadhaar-issuing body could also impose stiff penalties for violations, such as failure to obtain consent for authentication, and in case of data breaches, a top source told PTI.
The proposed amendments in the Aadhaar Act are in line with the Srikrishna panel recommendations that had highlighted that the UIDAI should not only be autonomous, but it should also have powers that are similar to traditional regulators so that enforcement actions can be undertaken.
The suggested amendments will give UIDAI more powers tocrackdown on violation, the source said.
Companies look to regain access to Aadhaar
Financial service providers have been waiting to regain access to Aadhaar-based verification after the Supreme Courts earlier verdict made it difficult to do so.
Fintech companies, which offer a range of services like instant paperless loans, mutual fund investment options, and digital payments, are reportedly writing to the ministry of electronics and information technology (MeitY) requesting inclusion of all regulated entities in the amendment that will be placed before Parliament.
If the amendment is brought only for banks then the broader fintech industry will suffer and the problem will not be solved, hence the industry is set to reach out to the ministry requesting to bring all regulated entities within the amendments purview, a senior executive at a payments company told the Economic Times.
What this means for you?
After the landmark Supreme Court verdicton Aadhaar in September, the cabinet has approved necessary changes to the Aadhaar law. This means that you will not have to link your bank account or mobile number with Aadhaar, or even give the 12-digit number for school admissions and other private services. However, Aadhaar is mandatory for PAN and other welfare schemes.
The amended law is expected to obtain Parliament’s approval in the winter session. The law is likely to be amended to protect personal data and ensure the privacy of the Aadhaar holder.
Elton Gomes is a staff writer at Qrius