The Single Identification Authority of India (UIDAI) will charge private players Rs. 3 TTC for successful user authentication through Aadhaar e-KYC, according to the draft regulations released on September 15, 2021. Each application for Yes / No authentication sent to UIDAI will also cost companies Rs. 0.50 per transaction.

All government agencies will be exempt from these fees, under the proposed rules. UIDAI accepts suggestions on the proposed tariff structure until October 6.

This month, the government also allowed telecommunications companies to issue new SIM cards using Aadhaar e-KYC. As the UIDAI drafts new Aadhaar e-KYC pricing for private actors, the legality of these use cases remains in dispute after the Supreme Court explicitly banned private access to Aadhaar in 2018.

What do the UIDAI interim Aadhaar e-KYC pricing rules offer?

  • Private player prices: The Rs. 3 for e-KYC transactions based on Aadhaar will replace the Re. 1 charge suggested earlier. For yes / no authentication services, UIDAI offers a charge of Rs. 0.50, even if the transaction fails.
  • No fees for government agencies: Authentications performed by state and central governments for the transfer of benefits and services will be exempt from all charges.
  • License fee: The license fees to perform Aadhaar authentications, as well as the financial disincentives, will be billed separately from the authentication fees.
  • Payment deadline : Private players will be required to pay their membership fee within 15 days of invoicing, failing which the UIDAI will charge 1.5% interest per month on the amount due.
  • Transaction Error Code Fee: The offered authentication fee does not include providing details of transaction error codes. These charges will be issued separately.
  • Tariff revision every two years: The price of authentication will be revised every two years. UIDAI proposed to link the price to the RBI Consumer Price Index, which is used to track inflation. The effective price after adjusting for inflation will be rounded to the nearest 10 paise.

Why has the Supreme Court banned businesses from using Aadhaar-based e-KYC?

In 2018, a Supreme Court bench led by Chief Justice Dipak Misra read Article 57 of the Aadhaar Law which allowed private players to use Aadhaar for authentication. In the majority judgment drafted by Justice AK Sikri, the Supreme Court said:

Even assuming that Parliament did not intend to do so, the impact of the aforementioned characteristics would be allow the commercial exploitation of individual biometric and demographic information by private entities. Thus, that part of the provision which allows legal persons and natural persons to also request authentication, also on the basis of a contract between the natural person and this legal person or natural person, would infringe the right to privacy such individuals. This part of the article is therefore declared unconstitutional. – Page 560, Majority judgment of Judge AK Sikri (emphasis added)

Read: Government authorizes Aadhaar e-KYC for telecommunications despite Supreme Court ruling overturning article 57 of the 2016 Aadhaar law

On what basis did the government reintroduce private access to Aadhaar?

The Center introduced the Aadhaar and other laws (amendment) 2019 ordinance on February 28, 2019. The ordinance allowed private actors to use Aadhaar for verification, but only if the UIDAI is satisfied that these entities are:

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  1. complies with certain confidentiality and security standards, or
  2. permitted by law, or
  3. request authentication for a purpose specified by the central government in the interest of the state

UIDAI’s latest project on pricing for private actors to use Aadhaar-based e-KYC builds on this amendment. Its validity, however, has been challenged by petitioners in the Supreme Court, who argue that the amendment violates the 2018 court ruling, The Leaflet reported.

e-KYC for private actors: Chronology of events

  • 2016 – Aadhaar Law: The Aadhaar Law allowed companies to verify the identity of individuals using their Aadhaar number.
  • 2018 – Supreme Court ruling: The Supreme Court struck down Article 57 of the Aadhaar Law, declaring unconstitutional the ability of private companies to verify identity using Aadhaar.
  • 2019 – New Aadhaar ordinance: The central government reintroduced private access to Aadhaar in 2019 with the Aadhaar and Other Laws (Amendment) Ordinance, 2019.
  • 2021 – Telecom reforms: The Department of Telecommunications allows private companies to use Aadhaar for KYC based on the 2019 Amendments to the Aadhaar Law.
  • 2021 – New UIDAI tariffs: UIDAI releases new provisional prices for private players to authenticate users through Aadhaar e-KYC.

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