Cabinet clears ordinance to permit use of Aadhaar by banks, telecom companies

Feb 28 ; Union Law Minister R S Prasad said the Union cabinet on Thursday has approved the promulgation of an ordinance to allow the voluntary use of Aadhaar for opening a bank account and procuring a mobile connection. It also provides for strict punishment for violation of customer’s privacy or other misuse.

Aadhaar can be used as KYC on a voluntary basis under the Telegraph Act and PMLA rules. Any entity using Aadhaar will have to adhere to privacy guidelines,” said law and justice minister Ravi Shankar Prasad after the cabinet meeting.

Supreme Court has barred use of Aadhaar by banks and telecom companies for verifying KYC details of a customer in a landmark judgement delivered in September last year.

Aadhaar amendment bill was passed by the Lok Sabha but it is pending in the Rajya Sabha. The bill passed by the Lok Sabha will expire with the end of 16th Lok Sabha’s term.

Prasad also said the voluntary use of Aadhaar will be considered in either electronic or physical form.

“Any entity that takes Aadhaar will follow the privacy standards. Aadhaar can be used on voluntary basis for KYC documents for Telegraph Act and the Prevention of Money Laundering Act,” he said

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