With customers’ nod, banks keep using Aadhaar for e-KYC

Bengaluru: Banks continue to use Aadhaar for e-KYC, saying it is legitimate. In what seems to be a battle of interpretation, while lawyers and activists say the SC judgment bars banks and telecom companies from asking for Aadhaar, except in the case of DBT (direct benefit transfer) accounts, banks say that Aadhaar-based payments and e-KYC is possible as long as they get customer consent.

Indian Bankers Association CEO V G Kannan says they’ve made representations to both the finance ministry and RBI in this regard. “Banks have taken two different stances. One set of banks have said they will completely stop the usage of Aadhaar unless the customer comes forward and declares that the particular account is being used for DBT benefits. Another set of banks have decided to continue using Aadhaar Enabled Payment Services for all accounts — non-DBT accounts included — and Aadhaar for e-KYC purposes with customer consent,” says Kannan.

Canara Bank executive director M V Rao said the bank is continuing to do Aadhar-based e-KYC with customer consent. “The bank has not made any changes to move to usage of the 16-digit virtual ID in place of the 12-digit Aadhaar number. We are fully compliant with the SC orders and have written to the finance ministry about our interpretation of the Aadhaar judgement,” he said.


Syndicate Bank MD Mrutyunjay Mahapatra said the bank continues to use Aadhaar for e-KYC. “There is no question of delinking or deleting Aadhaar data as we always retrieved information for validation from the Aadhaar platform,” he said.

“The SC verdict is very clear and companies cannot be asking for Aadhaar details,” said former additional solicitor general of India, P Wilson.