Aadhaar to be voluntary for mobile connections, bank accounts

The Supreme Court had ruled against the mandatory linking of Aadhaar with bank accounts and mobile phone connections. Read this to know how it impacts your decisions.

Aadhaar to be voluntary for mobile connections, bank accounts

The Central Cabinet has given its nod towards amendments in the communications and money laundering laws; a decision that aligns with its stand regarding the Supreme Court’s ruling on Aadhaar and privacy.

In September this year, the Supreme Court had ruled against the mandatory linking of Aadhaar with bank accounts and mobile phone connections. It did so by striking down Section 57 of the Aadhaar Act, which had made it mandatory to link the 12-digit biometric ID with these services. The Court also proclaimed that such a law didn’t have any legal tenability, particularly considering individual privacy. 

Related: 7 benefits of Aadhaar Card

The cabinet approval paves the way for amendments in the Telegraph Act and the Prevention of Money Laundering Act, making the disclosure of Aadhaar optional. The amendments, which are likely to be introduced in the winter session of parliament, makes unlawful access to the Aadhaar database punishable with up to 10 years in jail, as against the erstwhile term of three years. Minors will have the option to withdraw their Aadhaar linkage on attaining majority. 

Although mandatory linking of Aadhaar had made processing of new mobile connections faster and cheaper, telecom companies seem largely unfazed by this decision as they go back to the previous system of authenticated applications.

Related: Has your Aadhaar been deactivated? Here's what you have to do 

What is Section 57 of Aadhaar Act?

Section 57 allowed the use of Aadhaar to establish the identity of the Aadhaar card holder by the State, body corporate, or any person. The Supreme Court found that this section violated Article 14 of the Constitution (equality before the law and equal protection by the law). The Court noted that the Aadhaar server stores vital data and its misuse by a third party can violate the privacy of citizens.

A five-bench constitutional bench formed by the Supreme Court struck down multiple sections of the Aadhaar Act after judging them unconstitutional. Before this ruling, the Aadhaar Act allowed private companies to use Aadhaar as a tool for verification purposes. While the court upheld linking of Aadhaar with PAN, linking it to mobile connections, bank details – or even school admissions, for that matter – was declared unconstitutional.

Related: Have a look at new PAN rules that is effective from December 5 

What happens next?

Now a person can refuse to share Aadhaar details for opening a bank account or getting a new SIM card. The ruling is also likely to empower the Unique Identification Authority of India (UIDAI) to punish entities that ask for Aadhaar details from cardholders without authorised approval. Thus, the UIDAI will be a more empowered body that will protect the privacy of cardholder from being compromised.

Related: Move over biometric eKYC; QR code-based 'offline Aadhaar' could soon be a reality 

What is the downside of this decision?

Linking of Aadhaar had made the verification process faster. Besides, by using Aadhaar details, telecom and banking companies could avoid the cost and time of physical verification of identification and address details of applicants. As a result of the decision, telecom companies will go back to using authenticated application forms and the QR code that these forms generate.

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