RBI: Aadhaar e-KYC Authentication Application Allowed For NBFCs, Payment System Providers

The Reserve Bank of India has allowed applications for Aadhaar e-KYC Authentication Licence on behalf of NBFCs, payment system providers and payment system participants. Under Section 11A of the PML Act, 2002, entities other than banking firms may be authorised, by Central Government notice, to authenticate a client's Aadhaar number using the e-KYC facility of Unique Identification Authority of India (UIDAI). "Such notification shall be issued only after consultation with UIDAI and the appropriate regulator," said RBI.

The apex bank also mentioned in the notification that "A detailed procedure for processing of applications under the aforementioned Section for use of Aadhaar authentication services by entities other than banking companies has been provided by the Department of Revenue, Ministry of Finance vide their circular dated May 9, 2019."

RBI further stated in the statement that "Accordingly, Non-Banking Finance Companies (NBFCs), Payment System Providers and Payment System Participants desirous of obtaining Aadhaar Authentication License - KYC User Agency (KUA) License or sub-KUA License (to perform authentication through a KUA), issued by the UIDAI, may submit their application to this Department for onward submission to UIDAI. The applications can also be forwarded over email. The format of the application is provided in the Annex to this circular."