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UIDAI Asks Telecom Firms To Submit Plan To Discontinue Aadhaar-Based e-KYC

The Unique Identification Authority of India (UIDAI) has asked telecom companies to submit a detailed plan within the next 15 days on discontinuation of Aadhaar-based authentication service used by them to verify their customer.

A circular to this effect has already been issued to the telecom service providers (TSPs) including Bharti Airtel Ltd, Reliance Jio Infocomm Ltd and Vodafone Idea Ltd.

This comes within a few days of the Supreme Court barring private sector companies from seeking Aadhaar data.

“All TSPs are called upon to immediately take actions in order to comply with the judgement dated 26.09.2018. In this regard, TSPs are hereby directed to submit by 15th October, 2018 an action plan/exit plan to the authority for closure of use of Aadhaar-based authentication systems…,” according to the circular.

Private sector companies, including telecom operators, which used Aadhaar authentication as part of their electronic infrastructure, have been affected as these companies relied on the biometric database for doing e-KYC (electronic-know your customer).

“That portion of Section 57 of the Aadhaar Act, which enables body corporate and individuals to seek authentication is held to be unconstitutional,” a five-member Constitution bench headed by Chief Justice Dipak Misra said in its judgement on 26 September.

Section 57 of the Aadhaar (targeted delivery of financial and other subsidies, benefits and services) Act, 2016 allows the use of the unique ID for establishing the identity of an individual for any purpose, whether by the state or corporate or person.

The provision has been read down by the court and now only allows the government to use Aadhaar for various social welfare schemes.

According to an industry expert who spoke on condition of anonymity, the move will force private sector companies to move from an online authentication model to an offline one, which would be both expensive and time consuming than the former model.

“It could increase the cost of authentication from ₹15 per person, which is the current cost of e-KYC verification, to ₹100 per person for a physical KYC,” the person added.

In the offline model of authentication, telecom companies have to collect paper forms with signature, photographs, ship to verification centre and call up the customer to cross-verify submitted details, which ideally takes around 24-36 hours to verify a customer.

“In order to ensure smooth discontinuation…there are certain requirements which are there under the Aadhaar regulations…so the companies are in the best position to know what exactly is needed and they can submit their plan by 15 October. If any additional requirements are to be done from the UIDAI’s side, we will tell them after receipt of their plan,” UIDAI chief executive officer Ajay Bhushan Pandey told PTI.

Other than telecom operators, fintech companies selling loans, mutual funds and insurance, digital payments companies and payment banks have been severely impacted with the apex court’s judgement last week.

The digital payments industry may lobby the finance and law ministries to formulate a law that will allow them access to the biometric database, said Vishwas Patel, chairman of Payments Council of India, the industry body that represents all digital payments companies in India. – Live Mint

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