Homeeconomy News

Banks, telcos to give customers an option to modify KYC with a non-Aadhaar document, says UIDAI CEO Ajay Bhushan Pandey

Banks, telcos to give customers an option to modify KYC with a non-Aadhaar document, says UIDAI CEO Ajay Bhushan Pandey

Banks, telcos to give customers an option to modify KYC with a non-Aadhaar document, says UIDAI CEO Ajay Bhushan Pandey
Profile image

By Shereen Bhan  Nov 15, 2018 6:17:14 AM IST (Updated)

Ajay Bhushan Pandey is a 1984 batch Indian Administrative Service officer of Maharashtra cadre. He is the current chief executive officer of the Unique Identification Authority of India (UIDAI), the nodal agency of Government of India responsible for implementing Aadhaar. Pandey, 56, has been steering Aadhaar in India since its beginning in 2010. Panday said UIDAI has asked Telecom companies to provide an exit plan from Aadhaar. He also said banks, and telcos soon will give customers an option to modify KYC with a non-Aadhaar document.

Recommended Articles

View All

In a wide-ranging interview with Shereen Bhan, Pandey discussed the Supreme Court verdict on Aadhaar, how Fin Tech companies are exploring the option to use offline authentification, among a raft of other topics.
Watch the video here.
Edited Excerpts:
It has been a little over two months since the Supreme Court order which curtailed the usage of Aadhaar. I want to get a sense from you on where things stand now and your view on deletion of logs beyond the six months period, what is the status check on that?
To say that the Supreme Court has curtailed the use of Aadhaar needs to be qualified. The court has said that the whole Aadhaar scheme is constitutional, it does not violate the privacy. It meets the concept of constitutional trust, good governance and digital privacy. It also said that Aadhaar project is unique, it is unparalleled and also it is a document of empowerment. So, having said that it has also held Section 7 of Aadhaar Act where it has said that for all subsidy schemes Aadhaar can be made mandatory with the qualifier which is there in the Aadhaar Act itself where it said that if the fingerprint doesn't match, should that person be denied? Our Act also says that it should not be denied. The Supreme Court has struck down a part of Section 57. The apex court said that if there is a private contract, where there is no public interest and it is being done by a third party, that is where the Supreme Court has said that is unconstitutional.
So, what we have done is, we already have the list of the people who were using Aadhaar for various purposes, so from that we have figured out that who are these people who should not be using Aadhaar as such.
Who are the people who should not be using Aadhaar?
For example, Supreme Court has said about the telecom companies. So, we have told the telecom companies that here is the Supreme Court order. Now the Supreme Court order is public, so everybody is supposed to follow the order.
So, in that particular case we have told the telecom companies, similarly there are some other private companies, so we have told everyone that here is the Supreme Court order, please follow it and give us an exit plan. Now, in that exit plan the provision is provided in the Aadhaar regulation itself. Why there is a need for an exit plan? Because once you are rolling out certain services, for example in case of a telecom company, they were giving sim cards on the basis of the fingerprint - Aadhaar authentication, now they will have to make an exit from this whole system and for that purpose, there has to be an exit plan. It is provided in the Aadhaar regulations.
So, have they come back with an exit plan? By when will the exit plan be put in place?
They have told us that they are already in the process of making that exit plan and they need some time.
How much time?
Some companies have asked for 2-3 months' time. So, this is the kind of time we have taken. We have taken the matter with the department of telecom (DoT).
DoT has also told them that this Supreme Court order has to be followed. They have given them an alternate digital plan because the whole idea is that the people should not suffer because earlier if they were doing with Aadhaar, there should be equally efficacious digital process through which people should be able to get sim card because this should not lead to going back to the paper age or stone age.
If you are given to understand by telecom companies that they require 2-3 months' time to be able to put this exit plan in place, who is going to monitor this? Will you monitor this, will the department of telecom monitor this? What is the timeline that you are working with to ensure that the order is actually complied with?
Here there will be two agencies involved, one is the department of telecom and from the UIDAI's side, in fact, both of us will be required to monitor that the Supreme Court order is fully complied with and that is exactly what we will do.
By when can we expect the telecom companies will be in compliance with the order? By the end of the year or will it take longer than that?
It should be sooner than that.
What about banks because that is the other problem area?
As far as the banks are concerned, the Supreme Court has already said that for Section 7. Because the banks are also a medium through which the subsidies are being transferred. For example, LPG subsidy is getting transferred to the bank accounts. Similarly, you have MGNREGA payments, you have scholarships, there are various pension payments, they all are Section 7 schemes.
So, wherever Section 7 schemes are involved and where the money is going through the them, the banks as per the Supreme Court order should be entitled to use Aadhaar authentication and Aadhaar facility and in such cases, they do not have to make that changes. However, for those bank accounts, for example, tomorrow if you go and I am not a beneficiary of any particular scheme then in that particular case nobody should require to give Aadhaar number for opening a bank account and that is what the banks are already doing.
Do banks have an exit plan that they have shared with you?
Banks as such are not required at this moment because all the banks are also involved in the direct benefit transfer scheme.
Not every account holder is part of the direct benefit transfer scheme. So, if I did not want my Aadhaar to be linked but I was forced to have my Aadhaar linked, what is the status today?
In such cases what we have advised the telecom companies and other users of Aadhaar is that they need to give this facility to their account holders - whether it is a sim card subscriber or the bank account, or pension or whoever account holder who is not receiving any benefit, he should give an option that if he is able to replace his KYC with some other non-Aadhaar document.
Is there any data today on how many people have initiated the process to exit from Aadhaar from either a telecom company, from banks, for their pensions?
We don't have this data, the telecom companies will have the data or the banks will have the data. We have told them that this is how they need to implement this orders of the Supreme Court.
Have you got any complaints that people have initiated the process but banks or telecom companies have not done the process?
No, we have not got any complaints so far.
 Let me then ask you about a statement that you made and you clarified that service providers can use offline verification tools like e-Aadhaar, masked Aadhaar or QR code without access to biometrics, how is this not a violation of the Supreme Court order because it still is fundamentally linked to Aadhaar and you are talking about third party players, you are talking about fin tech companies for instance?
The Supreme Court has clearly said in its judgment that Aadhaar authentication where you put your biometric or through your online one-time password which comes on to your mobile number if you all are verifying the identity through such means we call it an authentication. So, if you are doing through authentication then there has to be some law, some law has to be there. Supreme Court has also said that, however, the individual is at the liberty to use his physical Aadhaar card. Everyone has been given an Aadhaar card now just imagine that in our country of 130 crore people what we estimate is approximately 50-60 crore people will only have an Aadhaar card, no other ID document which can be recognised nationally.
For example, suppose a labourer from West Bengal comes to Delhi and he can’t get any service on the basis of his ration card of West Bengal. But through his Aadhaar card he can get all the services there so what the Supreme Court has done, it has permitted the voluntary use of Aadhaar card as such.
So what is the offline verification? It is an electronic version of physical Aadhaar card. So, e-Aadhaar is an electronic Aadhaar. An electronic Aadhaar can be offline verified. Offline when I am saying is that it can be electronically verified but without pinging the Aadhaar servers. So what happens is suppose if you take your electronic Aadhaar and go to a bank, it will be able to verify the digital signature of that electronic Aadhaar, should be able to provide you the service because you have volunteered to use your electronic Aadhaar which is permissible as per the judgment of the Supreme Court.
You have had this legally vetted?
Yes, correct.
You have got the Attorney General’s opinion on whether this in compliance with the Supreme Court judgment and it is?
Is this the way out so to speak then as far as third party providers are concerned, Fin Tech companies are concerned? How many people have started this process of using this offline authentication?
We had a workshop of all Fin Tech companies because the Aadhaar is very powerful and Supreme Court also has mentioned that it is an empowerment document. As a citizen, as a resident if I have an Aadhaar card or e-Aadhaar, it is my free will to use it wherever I want, nobody can make it mandatory unless until there is a law, however, I should be able to use it, particularly when 50-60 crore people in India only have Aadhaar card.
So, they should be able to freely use it. So, we are working with various stakeholders, the FinTech companies, because we do not want India's digital journey to get hampered.
Supreme Court order also told you to put more checks and balances in places and more safeguards in place. Since you were talking about the workshop that you have done with Fin Tech companies, what are the further safeguards that you have put in place?
Let me explain to you how the offline verification will work. In this offline verification you can go to our website and you can download one version of Aadhaar Card where your Aadhaar number will be masked, so your Aadhaar number is not exposed, it has only your name address and photograph which anyway in today's world your name address and photograph is in the voter ID card, voter list, so privacy issues are not to that extent there. So, if that kind of an Aadhaar card and which is digitally signed by us, that can be used by the Fin Tech companies, technology companies, any service provider without impinging your privacy and that itself is a very big safeguard.
In fact, the Justice Srikrishna committee was constituted for the overall data protection, that committee also recommended this offline verification, virtual ID, these are the certain methods which will ultimately strengthen the data privacy, data protection and will protect the privacy of Aadhaar. It will also prevent misuse of Aadhaar. The Supreme Court in its judgement has in fact impressed upon the government to implement Justice Srikrishna's report.
We are still waiting for clarity on whether the government is intending to bring forward the bill in this session of parliament. Do you have an update on whether the bill is coming or not?
Justice Srikrishna gave the recommendation in two parts. One is the part, which concerned Aadhaar. So in case of an Aadhaar, he recommended that offline or virtual ID and then various other measures also he has suggested and he has also given a draft amendment to Aadhaar act itself.
Are we likely to see the amendments being moved in the session of parliament?
So far, as we are concerned, we are in dialogue with the government and we are consulting these stakeholders because for every law-making, a certain process has to be followed.
But what will be the key amendments whether or not they get taken up in the next session of parliament we don’t know? What are the key amendments you will now need to make with respect to the Aadhaar act in light of the SC judgement?
What the SC has clearly said that the Justice Srikrishna’s recommendation has to be implemented with such modification as maybe dimmed necessary. So the de-facto whatever Srikrishna has suggested will have to be given due weightage and all will be key amendments except when we are discussing with these stakeholders, that if they say that there are certain inconsistency and if through the consultation process it is found out that, certain minimal changes are to be required, with those changes, we will go to the legislature.
Is there any thinking on how you can amend the law to ensure that section 57 is no longer unconstitutional?
A: No, I don’t think so. Once the SC has said that certain thing is unconstitutional.
But the day of the judgement there were many ministers of the government who said publicly and privately that there could be amendments that could be thought off to ensure that third party linkage is not such a big problem.
No, the statements which were given is that not to amend section 57 or something like that. What the SC itself has said that when it struck down the prevention of the money laundering rules or the telecom rules, what does SC said that in the current form, it is unconstitutional.
Will you give it legislative backing is my question? Will section 57 be now given legislative backing, is that the thinking, is that the work in progress?
I will approach it in a little different direction. The SC has said that there could be a law. SC has also said that if such law is brought about, what should be the overall contours of the law. The law must promote a legitimate aim of the state and then it also has to proportionality test. So if ever a legislature under the government – if the government moves a bill in the parliament and then the parliament makes the law, that has to satisfy two tests. One is the test of proportionality and the legitimate state aim and once such law is passed then that could be done.
Is that the plan?
No, what I am saying is that is something – in fact, I already gave in a statement earlier that it will all depend upon these sectors. For example, in the financial sector.
Could it be a special carve out for the financial sector for fintech companies etc that the government could choose to make amendments for section 57?
I think the appropriate authority would be – if it is a financial sector – it is the ministry of finance and the RBI have to decide.
Have you made the representation to them?
No. In fact they need to decide because so far the UIDAI is concerned, we will provide the service to authentication service, open the authentication service to every such agencies who is backed by a law and the law has to be proportionate.
But surely you would know whether the thinking within government. Whether it is the ministry of finance or RBI? There should be legislative backing to ensure that fintech companies are able to conduct business as they did prior to the SC order?
So far, as we are concerned, as I already mentioned, this offline verification does give an alternative. So it doesn’t require a law because these offline verification has been recommended by Justice Srikrishna, SC has said that Justice Srikrishna recommendations should be implemented. Offline verification does not impinge on the privacy part.
So when the law will be made, it is up to the parliament and then the concerned branch of the government.
What is our endeavour is that during this period, a message should go that it is hampering the fintech sector or something like that so what we are focusing on UIDAI side is that can we make this offline verification as smooth as possible without impinging the privacy or without impinging anywhere the SC judgement. So that is where our main endeavour is.
Have there been any conversations with the election commission on linking voter ID cards with the Aadhaar which was the proposal in 2015?
Prior to Aadhaar Act, Election Commission had initiated an exercise to link voter ID with Aadhaar card but in August 2015 when the Supreme Court restricted the use of Aadhaar only to few programmes then they suspended that activity. Now that this new judgement has come, as per this judgement Election Commission has to take a call. As far as the UIDAI is concerned, we will open its authentication service to any agency only if there is a backing of law.
The current judgement will not permit the Election Commission to force the UIDAI to mandatorily link voter ID cards with the Aadhaar card unless the law is amended?
That is correct.
So, the current provision doesn't allow for that?
That is correct.
So, has there been a request made by the Election Commission? Has there been any consultation between the Election Commission and the UIDAI on this matter?
Election Commission about two weeks back had a meeting with us. They wanted to understand the Supreme Court orders and what exactly is our view. So, we presented this view that this is what the judgement of the Supreme Court is and if ever this Aadhaar authentication is to be used so far as the linking of voted ID with Aadhaar number is concerned, there the law will be required.
However, just like people can use their physical Aadhaar card or e-Aadhaar card or offline verification, on a voluntary basis, just like anyone else can use it, the Election Commission can also use it. Today, if you want to register as a voter somewhere, you have two options, either you go to the electoral registration office or you go and apply online. When you apply online how do you prove your identity? That is where this offline verification or e-Aadhaar can become very useful.
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!