UIDAI asks digital companies to stop offering Aadhaar based services; banks exempt

UIDAI looks to have directed several companies for providing an exit plan from the Aadhaar system.

The UIDAI has reportedly asked digital companies to stop offering any kind of Aadhaar based service on their platform. This happens to be the very first change that has come since the Supreme Court's recent Aadhaar verdict which prevents companies from accessing the service.

Representational image. tech2/Kshitij Pujari

Representational image. tech2/Kshitij Pujari

As per the report by Economic Times, UIDAI has directed several companies for providing an exit plan from the Aadhaar system. The report also states that as of now only non-banking companies have been served with this notice from UIDAI.

This includes companies such as Eko India, PayPoint and Oxygen Services who have been asked, as per a document reviewed by ET, to give "an action plan/exit plan for exiting the Aadhaar ecosystem which shall include without limitation the aspects enumerated under Regulation 23 (2) of the Aadhaar (Authentication) Regulations, 2016".

Banking companies or digital wallets like Paytm who have obtained a banking license have not received a notice as per the report.

In an interview with ET Sunil Kulkarni, joint MD of digital payments company Oxygen Services said, "We are now looking for alternate methods for digital KYC and are also seeking guidance from the regulator in this matter."

Putting an end to years of litigation—and at the same time, possibly laying the groundwork for a fresh batch of court petitions on the Aadhaar project, the Indian Supreme Court delivered its verdict in the Aadhaar case on 27 September. The court split 4-1 — Justice Sikri authored the majority’s opinion, while Justice DY Chandrachud was the sole dissenter.

The court found both, Rule 9 of the Prevention of Money Laundering (Maintenance of Records) Rules, 2005 and notifications issued under it, and the Department of Telecommunications’ 23 March 2017 circular, mandating the linking of Aadhaar to an individual’s bank accounts and mobile numbers, respectively, to be unconstitutional.

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