Telcos Appeal Government To Make Aadhaar Verification Voluntary

• Telcos have suggested to approach Supreme Court for making Aadhaar use in e-KYC process voluntary
• The companies had said that with this, they will not have to introduce other forms of digital KYC process
• This development is made after DoT decided to use live picture with timestamp and government-issued ID card for e-KYC

Amidst the never ending saga of Aadhaar judgement, now the telecom operators have appealed the government for finding ways to bring back Aadhaar-based customer verification which will comply with the Supreme Court judgement.

The operators have suggested that legal ways to bring Aadhaar back may be explored by either approaching the SC for allowing voluntary use of the Aadhaar number for e-KYC (know-your-customer)process or introducing a legislative framework.

The companies have added that if Aadhaar-based verification is brought back as an voluntary option then the companies will not need to introduce any other form of digital KYC process, which can be both time taking and costly.

According to reports, this development comes in event after the department of telecommunications (DoT), unique identification authority of India (UIDAI) and the carriers decided to introduce a new way for e-KYC registration, using a live picture of the user with time stamp and photo of a government-issued ID card.

Recently telecoms such as Vodafone Idea, Bharti Airtel and Reliance Jio Infocomm had submitted their plans on exiting the Aadhaar-based verification.

At the same time, DoT is expected to give out its ruling soon since it has announced to have completed its review of the SC verdict.

KYC was introduced by the Reserve Bank of India (RBI) in 2002 as a certain kind of due diligence and regulation.  Under this rule, financial institutions and other regulatory bodies had to identify and collect specific information about their users. The move was aimed at combating money laundering.

However, with time, the process of KYC registration went digital with the growth of fintech companies.

As the operators were well-versed with this process of customer onboarding, the SC has struck down Section 57 of the Aadhaar Act due to which private companies from now on will not have the authority to demand Aadhaar id from the people.

Following this verdict, the UIDAI had directed the telecom companies to submit plans by October 15 to shut down its Aadhaar-based authentication systems.

Reportedly, almost over 90% of new subscriptions using Aadhaar were made due to certain factors such as convenience. Further, over 500 Mn Indian mobile phone users have already linked their Aadhaar to their phone number.

Some operators have also raised their concern stating that all the investments that have been made for e-kyc till date will be wasted if Aadhaar-based authentication is completely removed.

With so many pros and cons emerging on the Aadhaar ruling, it may be said that the decision on new ways of authentication can take some time to be implemented. – Inc42