“The Ordinance to allow individuals to voluntarily use Aadhaar for completing e-KYC formalities will boost secured digital transactions across the country.
Implementation of voluntary e-KYC will be a win-win situation for all stakeholders — banks and financial institutions, customers, and the government. Backing it up with robust data protection will hold the key to unlock the bright future of financial sector in India,” said Fidelity National Information Services Managing director-India Ramaswamy Venkatachalam.
The changes approved by the Ordinance are the same as those contained in a Bill proposed in January, which suggested an amendment in the Telegraph Act and the Prevention of Money Laundering Act to allow telecom companies, banks and financial institutions to verify the identity of their clients by authentication or offline verification of Aadhaar, or passport, or any other documents notified by the central government.
However, the manner in which the Ordinance was brought has come under some criticism. According to a legal expert who did not wish to be named, the process followed by the government has gone against convention. “Major decisions are not usually taken so close to the election. Because the Bill could not be taken to Rajya Sabha after passing in Lok Sabha, they have introduced it as an Ordinance,” he said.
Because the changes have been introduced as an Ordinance, it will have to be reconsidered again. “This (Ordinance) does not mean that private companies have been allowed to voluntarily use Aadhaar forever. This is only valid for the next six months, after which it needs to be brought before the Parliament or extended for the next six months,” said Sarvjeet Singh, Executive Director at the Centre for Communication Governance at National Law University Delhi.
Experts have also not ruled out the possibility of the Ordinance being challenged in the coming days.