Twenty-two financial institutions have been granted the right to perform authentication using the Aadhaar biometric ID, in line with stipulations of the Prevention of Money Laundering Act, 2002 (PMLA). A notification from the Revenue department of the Ministry of Finance dated May 4 lists Amazon Pay India among the entities concerned.
The permission means that the reporting entities shall verify the identity of their customer and the beneficial owner by authentication under the Aadhaar (Targeted Delivery of Financial and other Subsidies, Benefits and Services Act, 2016), if the reporting entity is a banking company.
Per the notice, the move comes after the central government said it has been satisfied that “the reporting entities other than banking companies shall comply with the standards of privacy and security under the Act mentioned above.”
According to the finance ministry, permission for the reporting entities to carry out authentication using the Aadhaar system was granted after consultation with the Unique Identification Authority of India (UIDAI) and the Reserve Bank of India which is the sector regulator.
This development by the Ministry of Finance comes after the government, last month, announced plans to allow more private sector entities to use Aadhaar authentication for a wide range of services. Critics say, however, that the move violates the ruling of the country’s Supreme Court on data privacy and security.
Elsewhere in financial payments, India’s Airtel Bank has, in partnership with the National Payments Corporation of India (NCPI), introduced a service which allows face authentication for payments. The system works with a customer presenting their Aadhaar number which is matched with their face to complete an online purchase payment, Mashable reports.
The face authentication system is an alternative for fingerprint biometrics, the Bank says, adding that it is the fourth financial institution in the country to make payment authentication possible with fingerprints and Aadhaar facial scan.
