The Union Ministry of Electronics and Information Technology (MeitY) has proposed new rules to allow private entities to use Aadhaar authentication for prescribed purposes.
The move is part of efforts to make Aadhaar more accessible to citizens and promote better access to services, help prevent fraud, ease of verifying an individual’s identity, build customer trust, and improve the entity’s reputation.
Previously, only the government ministries and departments were permitted to perform Aadhaar authentication. According to the MeitY statement, entities seeking to use Aadhaar authentication must submit a proposal to the concerned ministry or central and state departments, justifying how the authentication sought would promote ease of living, enable better access to services, prevent dissipation of social welfare benefits, and allow innovation and awareness.
If the ministry believes the proposal fulfils such a purpose, it will forward the proposal along with its recommendation to MeitY.
“Now, it is proposed that any entity other than a government ministry or department that desires to use Aadhaar authentication for the purpose of promoting ease of living and enabling better access to services, or usage of digital platforms to ensure good governance, or preventing dissipation of social welfare benefits, or enabling innovation and spread of knowledge, it shall prepare a proposal giving a justification as to how the authentication sought is for one of the said purposes and in the interest of the state and submit the same to the concerned ministry or department of the central government in respect of central subjects and of the state government in respect of state subjects," the MeitY said in a statement.
Benefits Of Private Entities Using Aadhaar Authentication: Rahul Tandon, chief product officer (CPO) of Safexpay, a fintech company, commented that private entities performing Aadhaar authentication can benefit in several ways. First, it can streamline their authentication processes and provide a quick and
convenient way to verify an individual's identity. Aadhaar authentication can also help prevent fraud and ensure that services or benefits are delivered to the right person, which can build trust with customers and improve the entity's reputation. Moreover, this will enable private entities to expand their customer base by providing better access to services.
In addition, allowing private players to perform Aadhaar authentication can promote innovation, ensure better service delivery, and create new opportunities for private players. This move sets the stage for flexibility and circumvents the “one size fits all” syndrome, as local nuances can be fitted into standardisation. While the proposed rules are a step in the right direction, Tandon notes that he looks forward to Aadhaar know-your-customer (KYC) norms being considered for entities other than ministries and departments of the central government and state governments for prescribed purposes.
How Customers Can Benefit: The proposed move could benefit customers in several ways:
Convenience: Aadhaar authentication could make it easier for customers to access services and benefits from private entities, as they would not need to provide multiple identity documents for verification.
Security: Aadhaar authentication could help reduce the risk of identity theft and fraud, as it is a biometric-based system that is difficult to replicate or manipulate.
Speed: Aadhaar authentication could speed up the process of availing services and benefits, as it would eliminate the need for physical verification or submission of multiple identity documents.
Financial Inclusion: Aadhaar authentication could facilitate the inclusion of underprivileged and marginalised sections of society by enabling them to access services and benefits more easily.
Reduced Costs: Aadhaar authentication could also help reduce costs for private entities by streamlining their verification processes and reducing the need for manual intervention. This could ultimately lead to cost savings for customers as well.
Overall, the move would bring several benefits to customers by promoting ease of living, convenience, and better access to services. However, it is important to ensure that the use of Aadhaar is regulated and safeguarded to protect the privacy and security of individuals’ personal data.
