Indian government responds to Supreme Court ruling with Aadhaar rule clarifications

India’s government has responded to the Supreme Court ruling which put significant new limits on the world’s largest biometrics program.

Private companies in India can still use Aadhaar authentication in offline mode to perform eKYC, Unique Identification Authority of India (UIDAI) CEO Ajay Bhushan Pandey says. Offline KYC and QR code-based verification can be used to leverage Aadhaar without biometric authentication, and the UIDAI will engage with the technology industry to increase awareness of the offline verification tools.

In an interview with Press Trust of India, Pandey said that the Supreme Court decision that bars mandatory Aadhaar authentication by private companies does not affect enrollment and updating procedures.

“As Aadhaar is going to be used in the offline mode, for opening bank accounts and other services, and because use of Aadhaar in Direct Business Transfer, Pan-ITR has also been held constitutional, the role of banks is going to be vital in the entire Aadhaar ecosystem,” Pandey explains. “So, Aadhaar enrollment and update activity undertaken by banks and post offices will continue as it was being done before.”

Whether or not the online version of Aadhaar can be used by private entities on a voluntary basis is not entirely clear at this time.

“We are seeking legal advice on whether or not a person can voluntarily use Aadhaar for opening a bank account or getting a SIM card,” Pandey said earlier, according to the Business Standard.

At least some banks are reported to be taking the position that Aadhaar can be used on a voluntary basis as they await clarification.

Whatever the legal status is now, it could also change. India’s Finance Minister Arun Jaitley says that parliament can pass new legislation to require mandatory biometric authentication through Aadhaar for SIM registration and opening bank accounts, though he did not indicate that such legislation is being considered, NDTV reports.

Jaitley expressed support for the decision, but said that rather than all of Section 57, the Supreme Court struck down only the government’s authorization of Aadhaar requirements for private entities by contract, and that it can also be required by law.

“By law it can still be done, provided you do it under the adequate provision of law and do it on the basis of that in this field it is necessary,” he said.

In the meanwhile, the National Payments Corporation of India (NPCI) and fintech firms are each also seeking legal advice.

“There’s still no clarity. Can we store data if we are doing offline authentication? What is the use of QR code if it doesn’t fetch current data from the UIDAI servers? The government should think about all these problems before offering a quick fix,” an industry expert told the Business Standard.

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