UIDAI clarifies banks use of Aadhaar eKYC

The Aadhaar-issuing authority Unique Identification Authority of India (UIDAI) wrote to the banks clarifying the instances and modes in which Aadhaar can be used, and a copy of the same was also sent to the Reserve Bank of India.

The UIDAI informed the banks that they can use Aadhaar authentication for beneficiaries of government subsidies and welfare schemes, and listed various options for the use of Aadhaar, such as Quick Response or QR code and offline Aadhaar. Physical Aadhaar card can be used for verification in an offline mode if produced voluntarily, it clarified.

According to UIDAI, banks will be entitled to seek authentication of the beneficiaries availing subsidies, benefits, services under Aadhaar Act, for transfer of any subsidy or benefit to the bank account of the beneficiary, as well as for facilitating the withdrawal of money through Aadhaar based micro-ATM machines.

This means Aadhaar enabled Payment System (AePS) and BHIMAadhaar Pay shall remain operative and bank can continue to maintain and provide these facilities so that Direct Benefit Transfer or DBT beneficiaries can withdraw their money through the micro-ATMs, AePS, BHIM Aadhaar Pay.

In its circular to banks, the UIDAI said that for customers giving declaration that they want to receive entitled benefits or subsidies of welfare schemes funded from the Consolidated Fund of India in their account directly, banks can perform Aadhaar-based authentication using eKYC for opening bank accounts too.

For all other customers, banks cannot use Aadhaar eKYC authentication for opening bank accounts. They are, however, not barred from accepting physical Aadhaar card or offline electronic Aadhaar, if offered voluntarily by an individual for opening bank accounts and verifying the authenticity through Quick Response code and others means.

The UIDAI has said that since banks will be using Aadhaar eKYC for opening bank accounts and withdrawal of money through AePS by DBT beneficiaries, it will be mandatory for the banks to provide Aadhaar enrolment facilities. So the earlier notification requiring every Scheduled Commercial Bank to provide Aadhaar enrolment and update facilities to its customers, will continue to operate.