In order to authenticate beneficiaries of government subsidiaries and welfare schemes, UIDAI has clarified that banks can use Aadhaar e-KYC, PTI reported citing sources. For other customers, the physical card will be used for verification.
Last week, UIDAI, the Aadhaar issuing body wrote to banks of instances and modes of using Aadhaar authentication, and a copy of the same was sent to the Reserve Bank of India (RBI), a senior UIDAI official told PTI.
The Unique Identification Authority of India had received a legal opinion on the matter after the recent Supreme Court verdict that restricts the use of Aadhaar by private entities except for direct benefit transfers of welfare schemes and government subsidies.
In addition to the clarification on when to use Aadhaar e-KYC, UIDAI also informed the banks on various 'options' to use Aadhaar, like QR code and offline Aadhaar. It further clarified that the offline mode of Aadhaar verification can be used if the customer produces the physical Aadhaar card voluntarily.
For beneficiaries of subsidies and other benefits under the Aadhaar act, the authentication is necessary in order to be able to facilitate the withdrawal of money through Aadhaar based Micro-ATM machines, AePS (Aadhaar-enabled Payment System) and BHIM Aadhaar Pay.
For bank accounts opened for usage other than that of Direct Transfer Benefit, banks cannot demand Aadhaar for KYC purposes, however, Aadhaar will remain one of the officially valid documents, when presented voluntarily by the customer. The bank is required to use offline modes for Aadhaar verification in such cases and mask the first 8 digits when storing the physical copy of the proof.
If the banks wish to go the paperless way, they could develop a mobile/web application to leverage the QR code printed on physical Aadhaar cards or other digital modes of holding Aadhaar. Using QR code will allow the verification of the user's identity, without pinging the Aadhaar server, like in the case of e-KYC.