Cabinet Approves Amendments, Making Linking of Aadhaar with Mobile Numbers and Bank Accounts as an Optional KYC

Cabinet Approves Amendments, Making Linking of Aadhaar with Mobile Numbers and Bank Accounts as an Optional KYC

New Delhi: On Monday, December 17, the Union Cabinet granted its assent to amendments made to the Telegraph Act and Prevention of Money Laundering Act (PMLA) pursuant to the historic Supreme Court Judgement on September 26 pertaining to restrictions imposed on the use of Aadhaar by private companies. The Court had held that Aadhaar would continue to be mandatory for PAN card linking in order to file income tax. However, it would not be compulsory to link Aadhaar to bank accounts and telecom service providers could not seek its linking for mobile connections.

The amendments were made incorporated in order to provide legal backing for implementing the biometric ID system with mobile numbers and bank accounts as an optional KYC. The proposed amendments are to be altered in line with the original Aadhaar Act, a Bill for which is likely to be introduced during the ongoing Winter Session of Parliament.

As per the approved amendments, an Aadhaar holder has the option of choosing offline verification through QR code, wherein it will not be necessary to share the Aadhaar number to complete the transaction.

The top Court had struck down Section 57, whereby the bench clearly stated that private companies/ firms now could not insist on presentation of Aadhaar, which as per the previously read Section 57 of the Act, provided sharing of data with private body corporates.

Following the issued blueprint of a reconstructed framework for the biometric system, the Telegraph Act has been amended to provide support for issuing mobile SIMs through Aadhaar and as will the PMLA, which is deemed to provide individuals the option of linking Aadhaar in the KYC option.

The amendments also include punishment for attempting to hack the Aadhaar database, which amounts to a proposed imprisonment up-to 10 years. At present, the offense amounts to 3 years of imprisonment.

Minors enrolled for the scheme through parents, are entitled to avail the option of opting out of the Aadhaar database base pursuant to becoming a major.

Aadhaar scheme is a concept introduced by the UPA Government with the primary object of making subsidy and benefit deliverance more effective, thereby eliminating leakages in the process. Although the scheme has its share of pros and cons, today it is considered to be the world’s largest biometric ID system available. Although apprehensions were made against the Aadhaar scheme. Earlier this year, the Supreme Court upheld the constitutional validity of the scheme with the motive to ensure that the Aadhaar is more citizen-friendly and to avoid any form of breach of personal data, including biometrics.


Aadhaar Act
Aadhaar Card
Know your customer (KYC)
Prevention of Money Laundering Act (PMLA)
section 57 of the Aadhaar Act
UPA Government
Winter Session of Parliament

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