Unfazed by the SC verdict, Banks still insisting on Aadhaar to open account

Bengaluru, Sep 28: Un fazed by Supreme Court verdict on Aadhaar, a few banks and private companies are still continuing to demand the Aadhaar number to provide services to individuals.

The Supreme Court Wednesday upheld the constitutional validity of 'Aadhaar' but limited the scope of the controversial biometric identity project, ruling it is not mandatory for bank accounts, mobile connections or school admissions.

"We are aware of the news about Aadhaar and the Supreme Court verdict but We have not got any written orders from our head office regarding Aadhaar. Until anything in writing is given, we will continue with the old procedure," said a bank employee.

Also, some NBFC and MFIs believe the judgement doesn't change anything for them as the SC did not completely bar them from using customer's Aadhaar. They say the judgment has only said that Aadhaar is no more mandatory.

According to them, even if it is now only an optional ID for KYC (Know-your-customer), it would hardly make a difference as customers rarely resist giving out their Aadhaar numbers. They say even a customer would prefer an Aadhaar-enabled e-KYC as it hastens the whole process of loan disbursal.

However, Mobile telephony operators have, however, given their customers relief on the Aadhaar requirement for a new number and linking existing numbers.

Govt mulls legal backing for private companies to use Aadhaar

The government could look at introducing new sectoral regulations or amending existing ones to allow entities such as banks and mobile companies to continue using the Aadhaar number for faster authentication and customer acquisition.

Hours after the judgement was pronounced by the Supreme Court, FM Arun Jaitley said it was his preliminary understanding that Aadhaar use by private entities "pursuant to a contract" wasn't permitted but that may not be the case if there is legislative support.

"My generic answer would be, on private entities, it needs to be backed by law. We have to see what is the rationale that they have given that's my understanding," he said. "I have not had a detailed reading of the judgement yet.

Supreme Court on Wednesday struck down the Section 57 of Aadhaar Act; as a result, private companies cannot ask for Aadhaar card. That means it would not be mandatory to link Aadhaar to bank accounts and telecom service providers cannot seek its linking of Aadhaar for mobile connections.