UID/Aadhaar
RBI asks banks to bear the cost of deploying e-KYC of Aadhaar

In yet another example of burdening bank customers, RBI has asked banks to deploy infrastructure at own cost for using UIDAI’s Aadhaar biometric authentication for KYC

Although the Supreme Court has ruled that Aadhaar number from Unique Identification Authority of India (UIDAI) is not necessary for essential services, several government agencies are enforcing it on helpless citizens. Going a step further the Reserve Bank of India (RBI) is asking banks to bear the cost for deploying electronic-know your customer (e-KYC) launched by UIDAI.

 

In a circular issued on 2 September 2013, the central bank has asked banks to accept on-line Aadhaar authentication as an ‘Officially Valid Document’ under Prevention of Money Laundering Act (PMLA), 2002.

 

"In this connection, it is advised that while using e-KYC service of UIDAI, the individual user has to authorize the UIDAI, by explicit consent, to release her or his identity/address through biometric authentication to the bank branches/business correspondents (BCs). The UIDAI then transfers the data of the individual comprising name, age, gender, and photograph of the individual, electronically to the bank/BCs, which may be accepted as valid process for KYC verification," the notification says.

 

RBI has also 'directed' banks to have proper infrastructure in place to enable biometric authentication for e-KYC.

 

Here is the operational procedure that banks are required to follow for e-KYC exercise...

 

The e-KYC service of the UIDAI is to be leveraged by banks through a secured network. Any bank willing to use the UIDAI e-KYC service is required to sign an agreement with the UIDAI. The process flow to be followed is as follows:
 

1. Sign KYC User Agency (KUA) agreement with UIDAI to enable the bank to specifically access e-KYC service.
 

2. Banks to deploy hardware and software for deployment of e-KYC service across various delivery channels. These should be Standardisation Testing and Quality Certification (STQC) Institute, Department of Electronics & Information Technology, Government of India certified biometric scanners at bank branches/ micro ATMs/ BC points as per UIDAI standards. The current list of certified biometric scanners is given in the link below:
 

3. Develop a software application to enable use of e-KYC across various Customer Service Points (CSP) (including bank branch, BCs etc.) as per UIDAI defined Application Programming Interface (API) protocols. For this purpose banks will have to develop their own software under the broad guidelines of UIDAI. Therefore, the software may differ from bank to bank.
 

4. Define a procedure for obtaining customer authorization to UIDAI for sharing e-KYC data with the bank. This authorization can be in physical (by way of a written explicit consent authorising UIDAI to share his/her Aadhaar data with the bank/BC for the purpose of opening bank account) /electronic form as defined by UIDAI from time to time.
 

5. Sample process flow would be as follows:

  1. Customer walks into CSP of a bank with his/her 12-digit Aadhaar number and explicit consent and requests to open a bank account with Aadhaar based e-KYC.
     
  2. Bank representative manning the CSP enters the number into bank’s e-KYC application software.
     
  3. The customer inputs his/her biometrics via a UIDAI compliant biometric reader (e.g. fingerprints on a biometric reader).
     
  4. The software application captures the Aadhaar number along with biometric data, encrypts this data and sends it to UIDAI’s Central Identities Data Repository (CIDR).
     
  5. The Aadhaar KYC service authenticates customer data. If the Aadhaar number does not match with the biometrics, UIDAI server responds with an error with various reason codes depending on type of error (as defined by UIDAI).
     
  6. If the Aadhaar number matches with the biometrics, UIDAI responds with digitally signed and encrypted demographic information [Name, year/date of birth, Gender, Address, Phone and email (if available)] and photograph. This information is captured by bank’s e-KYC application and processed as needed.
     
  7. Bank’s servers auto populate the demographic data and photograph in relevant fields. It also records the full audit trail of e-KYC viz. source of information, digital signatures, reference number, original request generation number, machine ID for device used to generate the request, date and time stamp with full trail of message routing, UIDAI encryption date and time stamp, bank’s decryption date and time stamp, etc.
     
  8. The photograph and demographics of the customer can be seen on the screen of computer at bank branches or on a hand held device of BCs for reference.

      i    The customer can open bank account subject to satisfying other account opening 
            requirements.

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COMMENTS

Ramesh Iyer

3 years ago

Many Banks don't accept the Aadhar Card as a proof of Address, though they accept it as a Proof of ID. Wonder why this strange practice.

Also, most Banks don't accept Aadhar Card / Letter as proof of ID or address for Demat a/c operations.

Builders must pay VAT on under construction flats says Supreme Court

The Supreme Court upheld the Bombay High Court’s verdict that asked builders to pay 5% value added tax -VAT for under construction flats sold during 20 June 2006 to 31 March 2010.

The Supreme Court had ruled that value added tax (VAT) cannot be imposed on buyers and builders, developers have to pay the tax (5%) for under construction flats sold during 20 June 2006 to 31 March 2010. The apex court also clarified that VAT is not payable, if a fully constructed flat is sold to the buyer and builders will be liable to pay tax only on cost of construction.
 

However, there are chances that builder will recover these charges from buyers by adding it in costs and it will only create litigations between builders and buyers.
 

Earlier, citing a circular issued by the Maharashtra Sales Tax Department, builders were asking flat buyers to pay the additional money before 31 October 2012 for their homes bought between 2006 and 2010. However, several consumer organizations like the Grahak Panchayat had maintained that it is the builder, developer who will have to pay VAT and not flat buyers.
 

The Supreme Court order will have a direct impact on realtors from Karnataka, Maharashtra and Uttar Pradesh. The order also empowers all state government to issue circulars to levy VAT. Maharashtra government had issued a circular in 2006, and subsequently in 2007 levied a VAT of 5% on sale of flats.
 

The Supreme Court had clubbed 14 appeals from Karnataka and 12 from Maharashtra. Verdict means that developers in states such as Maharashtra, Uttar Pradesh and Karnataka, where VAT has been levied on such transactions will have to pay the charges. Builders were trying to recover this amount from the buyers.
 

Although, the state governments and even High Court has said that developers have to pay VAT, several were reluctant to pay the tax.
 

Advocate General for Maharashtra clearly stated, “Implementation of Rule 58(1-A ) of Maharashtra VAT shall not result in double taxation and in any case all claims of alleged double taxation will be determined in the process of assessment of each individual case." As builders have already paid taxes for raw materials and this may create issues of double taxation. However MVAT rule 58 (1-A) provides deduction of expenses on labour and service charges for the execution of the work related to the goods that has already been transferred.
 

Earlier, builders’ association CREDAI had approached the apex court after the Bombay High Court rejected their plea to impose only 1% VAT. In 2006, the state government imposed a VAT of 5% on constructions made between 2006 and 2010. The move resulted in an additional tax liability on flats, shops and bungalows sold by developers between 20 June 2006, and 31 March 2010.
 

To know more about VAT read, VAT on sale of under-construction flats in Maharashtra: All you need to know

User

COMMENTS

Gaurav Goyal

2 years ago

purchased flat in oct 13 of rs 4100000 including service tax, paid 600000 as booking amount enterted into aggrement for apply of loan, loan sanctioned in a month paid rs 1200000 as part payment ,after three mont another payment of rs 500000 after two month rs 500000 part payment total 2800000 has been paid now the bulder offer final payment and includes 5% vat on 41 lac who has to pay and on what amount.

RTI Judgement Series: Citizen can choose best route for obtaining information

The procedure set out by NBE as well as the RTI Act coexists and therefore, it is for the citizen to determine which route she would prefer for obtaining the information, the CIC ruled. This is the 179th in a series of important judgements given by former Central Information Commissioner Shailesh Gandhi that can be used or quoted in an RTI application

The Central Information Commission (CIC), while allowing a complaint, directed the Public Information Officer (PIO) and deputy director of National Board of Examinations (NBE) under the Ministry of Health and Family Welfare, to provide the information sought by the appellant under the Right to Information (RTI) Act.

 

While giving the judgement on 27 December 2011, Shailesh Gandhi, the then Central Information Commissioner said, "The Bench would like to highlight that just as the procedure put in place by NBE is not abrogated, the RTI Act passed by the Parliament also cannot be suspended and therefore, it is for the citizen to determine which route she would prefer for obtaining the information."

 

Gurgaon (Haryana) resident Saurabh Yadav, on 8 April 2011, sought from the Public Information Officer (PIO) information regarding question and answer papers of NBE. Here is the information he sought and the reply provided by the PIO under the RTI Act...

 

1.      (i) Attested photocopy of original question paper, Part I Series of FMG Exam held on 27/03/2011.

PIO's Reply—As per the policy of National Board of Examinations (NBE), question paper/answer key of multiple choice questions (MCQ) based exams cannot be provided.

(ii) Attested photocopy of original question paper, Part II Series of FMG Exam held on 27/03/2011.

PIO's Reply—As per the policy of NBE, question paper/answer key of MCQ based exams cannot be provided.

 

2.      (i) Attested photocopy of answer key of question paper, Part I Series 'B' of FMG Exam held on 27/03/2011. 

PIO's Reply—As per the policy of NBE, question paper/answer key of MCQ based exams cannot be provided.

(ii) Attested photocopy of answer key of question paper, Part II Series 'B' of FMG Exam held on 27/03/2011. 

PIO's Reply—As per the policy of NBE, question paper/answer key of MCQ based exam can not be provided.

 

3.      (i) Attested photocopy of original answer sheet of question paper, Part I, Series 'B' attempted by Saurabh Yadav Roll No. 11143392 in FMG Exam held on 27/03/2011.     

PIO's Reply—Scheme/format of application is available at NBE website- natboard.edu.in. Copy also enclosed.

(ii) Attested photocopy of original answer sheet of question paper, Part II, Series 'B' attempted by Saurabh Yadav Roll No. 11143392 in FMG Exam held on 27/03/2011.     

PIO's Reply—Scheme/format of application is available at NBE website- . Copy also enclosed.

 

Not satisfied with the PIO's information, Yadav, the appellant filed his first appeal.

 

In his order, the First Appellate Authority (FAA) observed, "NBE has spent years to frame the questions that now form part of its question bank. The question bank is a very valuable resource for the NBE. NBE has got these questions prepared by making payments to the experts and NBE holds its intellectual property rights over these questions. The question bank is maintained to screen Indian nationals with foreign medical qualifications and assess the minimum standard of Medical education at the MBBS level in India, the same are scarce and in case these questions are shared with the third party, candidate and institutions, the same will have a negative effect on the examination system. Therefore, questions of MCQ based examinations cannot be shown/ divulged".

 

In relation to query 3, the FAA noted: "Scheme/ format of application is available at NBE web-site natboard.edu.in. Copy of the same is also enclosed".

 

Yadav, still not satisfied with the FAA's order, approached the CIC with his second appeal.

 

During the hearing on 14 December 2011, the PIO stated that he had objections in providing the question papers (as sought in query 1) as the question bank was limited and the design of the examination had been dictated by the Supreme Court of India in Sanjiv Gupta vs Union of India (2005)1SCC45. He submitted that if two or three question papers were revealed, the Respondent-public authority would not have any further questions which it could ask in the examination. The PIO also argued that a larger public interest would be served by not disclosing the question papers and answer keys. As regards query 3, he stated that he was willing to provide the answer sheets so long as the Appellant applied for them in accordance with the procedure set out by NBE.

 

On the other hand, Yadav, the appellant, argued that he required the question papers along with the answer keys to determine whether he was properly marked or not.

 

The Bench reserved its order.

 

During the hearing on 27 December 2011, Mr Gandhi, the then CIC, reiterated that the right to information is a fundamental right of the citizens of India. It is premised on disclosure being the norm, and refusal, the exception. Further, it is legally established that information requested for under the RTI Act may be exempt from disclosure in accordance with Sections 8 and 9 only, and no other exemptions can be claimed while rejecting a demand for disclosure. Moreover, under Section 6(2) of the RTI Act, an applicant is not required to give any reason for requesting the information.

 

The PIO described the background to the Foreign Medical Graduates Examination (FMGE) Screening Test. He also referred to certain orders of the Supreme Court including in (2002) (3SCC696 dated 08/03/2002) wherein directions were issued in respect of Foreign Medical Graduates who had applied for registration with the Medical Council of India (MCI). Further, in Sanjeev Gupta vs Union of India (2005)(1SCC45) it was observed that MCI was the best judge to decide whether a person was duly qualified to practice medicine in India. The Court noted that as regards the FMGE screening test, MCI had concluded that post-disintegration of USSR, due to serious aberrations in the recruitment system and admission of students in institutions located in Russia, there was a decline in the standard of medical education in these countries. Consequently, keeping in view the larger public interest and need to main a certain standard for students passing from these institutions, MCI decided that such students would be required to do an internship for a year as well as qualify for the said screening test before they were given permanent registration in India.

 

Mr Gandhi said, "The above mentioned rulings lay down the importance of the screening test and the objectives behind it. This Bench however, is of the view that they deal with a different subject-matter and may not be relevant to determine whether the denial of information in the present matter was justified under the RTI Act and the specific exemptions contained therein."

 

The PIO has argued that if the information sought is revealed, then it is liable to be grossly abused and comprise the confidentiality of the examination process. The syllabus of the screening test was judicially approved and fixed by the Supreme Court. Further, the NBE was required to frame the questions for the Screening Test within the parameters fixed and only a limited number of permutations/combinations were possible limiting the number of questions. The PIO also submitted that the FMG Exam was conducted in public interest to screen the academic competence of professionals to whom the lives of prospective patients would be entrusted.

 

The Bench said, "It is pertinent to mention that the PIO has not cited any exemption in Sections 8 or 9 of the RTI Act to deny the information. This is clearly contrary to the legal position well-established in this regard. Moreover, the Bench is of the considered opinion that the arguments raised by the PIO do not attract any of the exemptions under Section 8 of the RTI Act. In the functioning of the government and other like authorities including the NBE public authority, there may be various instances where certain documents, records, procedures, etc have been treated as confidential and at times, explicitly so provided. However, with the advent of the RTI Act, such information has to be provided subject only to the exemptions of the RTI Act viz Sections 8 and 9. It may not be out of place to mention that where a test is conducted to screen the academic competence of professionals who are to be given permanent registration as medical practitioners, the questions set in such a test should necessarily be of a high standard testing the knowledge and competence of such persons, and not be mere repetitions from a limited question bank. The Bench is unable to agree with the PIO's arguments."

 

"At this juncture," Mr Gandhi said, "it must be noted that Section 9 of the RTI Act may be claimed as an exemption from disclosure of information where such disclosure would infringe a copyright subsisting in a person other than the State. Given that the FAA has already observed inter alia that the information sought is the intellectual property of NBE, Section 9 of the RTI Act is not applicable to the instant matter."

 

As regards query 3, the PIO specifically submitted that he was willing to provide the answer sheets so long as the appellant applied for them in accordance with the procedure set out by NBE.

 

Mr Gandhi said, "Section 22 of the RTI Act expressly provides that the provisions of the RTI Act shall have effect notwithstanding anything inconsistent therewith contained in the Official Secrets Act, 1923, and any other law for the time being in force or in any instrument having effect by virtue of any law other than the RTI Act. Given the above, two scenarios may be envisaged:

 

1. An earlier law/ rule whose provisions pertain to furnishing of information and is consistent with the RTI Act: Since there is no inconsistency between the law/ rule and the provisions of the RTI Act, the citizen is at liberty to choose whether she will seek information in accordance with the said law/ rule or under the RTI Act. If the PIO has received a request for information under the RTI Act, the information shall be provided to the citizen as per the provisions of the RTI Act and any denial of the same must be in accordance with Sections 8 and 9 of the RTI Act only; and

 

2. An earlier law/ rule whose provisions pertain to furnishing of information but is inconsistent with the RTI Act: Where there is inconsistency between the law/ rule and the RTI Act in terms of access to information, then Section 22 of the RTI Act shall override the said law/ rule and the PIO would be required to furnish the information as per the RTI Act only."

 

"The procedure set out by NBE as well as the RTI Act coexists and therefore, it is for the citizen to determine which route she would prefer for obtaining the information. The right to information available to the citizens under the RTI Act cannot be denied where such citizen chooses to exercise such right, as has been done by the PIO in the instant case," Mr Gandhi said.

 

He said, "If the PIO has received a request for information under the RTI Act, the information shall be provided to the applicant as per the provisions of the RTI Act and any denial of the same must be in accordance with Sections 8 and 9 of the RTI Act only. In view of the same, the Bench rejects the PIO's contention."

 

While allowing the appeal the Bench directed the PIO to provide the information on queries 1, 2 and 3 to Yadav, the appellant, before 20 January 2012.  

 

CENTRAL INFORMATION COMMISSION

 

Decision No. CIC/SG/A/2011/002724/16593

http://www.rti.india.gov.in/cic_decisions/CIC_SG_A_2011_002724_16593_M_72963.pdf

Appeal No. CIC/SG/A/2011/002724

 

Appellant                                         : Saurabh Yadav,

                                                            Sector-46, Gurgaon,

                                                            Haryana-122003

 

Respondent                                     : Dinesh Chand,

                                                            Public Information Officer &

                                                            Deputy Director,

                                                            National Board of Examinations,

                                                            M/o Health and Family Welfare,

                                                            Ansari Nagar, New Delhi-110029

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