Aadhaar: Start Paying Rs20 for Each eKYC, 50 paisa for Yes/No Authentication Now!
Moneylife Digital Team 08 March 2019
Unique Identification Authority of India (UIDAI), the authority tasked for the Aadhaar scheme, has now decided to levy charges for authentication service from requesting entities. 
Since, none of the entities, including private players and government owned, who want to use this authentication from UIDAI, would pay the charges from their own pockets, it would be passed on the all Aadhaar holders. 
So every time an Aadhaar number holder wants to do an eKYC or even yes or no authentication, she will have to pay the money. And this includes paying charges for availing ration from the public distribution system (PDS) shops as well since the buyer is required to undergo biometric-based Aadhaar authentication. This is because these shops, which are part of the PDS are still private entities, who are mandated to use Aadhaar authentication.  
In a gazette notification issued on 6 March 2019, UIDAI says, "Aadhaar authentication services shall be charged @ Rs20 (including taxes) for each e-KYC transaction and Rs0.50 (including taxes) for each yes/ no authentication transaction from requesting entities; and government entities and the department of posts shall be exempt from authentication transaction charges."
As rightly predicted by Dr Usha Ramanathan, an independent law researcher, Aadhaar has become an attempt by technocrats (and politician and bureaucrats) to turn everyone into a customer for financial technology-related products that are based on the UID data of over 1.21 billion Indian residents. 
UIDAI already charges Rs100 for successful generation of Aadhaar, Rs100 mandatory biometric update, Rs50 for updating demographic or biometric and Rs30 for Aadhaar search using eKYC and colour printout on A4 sheet. These charges were paid by the users to registrant entities.
UIDAI, in the latest gazette notification also appears to be playing a role of regulator for banks. It says those banks who are providing Aadhaar enrolment and update facilities would be exempt from the authentication transaction charges. "However, such banks, which fall short of the Aadhaar enrolment and update targets, as communicated from time to time, will be charged in proportion to the shortfall in achieving the target."
In addition, Ajay Bhushan Pandey, who is chief executive of UIDAI as well as revenue secretary, through this notification mandates entities who are using eKYC and yes/no authentication to deposit transactions charges within 15 days from the invoice issued.
“The delay in payment beyond 15 days shall attract interest compounded @1.5% per month and discontinuation of authentication and e-KYC services,” he warns. 
Those who does not want to pay authentication charges to UIDAI are asked to inform the authority and surrender their access. 
The ‘paid’ scheme from UIDAI, however is not new. In fact, as early as in January 2011 a report from the Nandan Nilekani-chaired Technology Advisory Group on Unique Projects (TAG-UP) elaborated and explained framework for private ownership of databases. (Read: Aadhaar: Private ownership of UID data- Part I https://www.moneylife.in/article/aadhaar-private-ownership-of-uid-data-part-i/32430.html
The 2011 report had brought out true intentions of the Nilekani led TAG-UP and UIDAI. For example, it says, 
  • Governmental data and databases are to be privatised through the creation of National Information Utilities (NIUs), which will then `own’ the data;


  • NIUs will be natural monopolies;


  • NIUs will use the data and the database to be profit-making and not profit-maximising, and the definition of these terms may, of course, vary;


  • Government will support the NIUs through funding them till they reach a steady state, and by doing what is needed to gather the data and create the database using governmental authority;


  • Once the NIU reaches steady state, the government will reappear as the customer of the NIU;


  • Government officers will be deployed in NIUs and be paid 30% over their salaries, which, even if the report does not say it explicitly, is expected to forge loyalties and vested interests;


  • The notion of holding citizens’ data in a fiduciary capacity cedes place to the vesting of ownership over citizens’ data in an entity, which will then have the government as their customer.
In short, what is happening today regarding levying charges for authentication has been in the pipeline for long. After the Supreme Court explicitly prohibited use of Aadhaar by private parties by declaring Section 57 of the Aadhaar Act, 2016, as unconstitutional, the government had tried to bring a new amendment in the Act for this. 
The government introduced an amendment in the Aadhaar Bill to allow private entities to use Aadhaar. In January 2019, the Aadhaar and Other Laws (Amendment) Bill was passed in the Lok Sabha with very little debate or scrutiny. However, with the Rajya Sabha adjourned sine die, the Bill could not go through and has now lapsed. 
This is when the government decided to bring an ordinance to allow private entities use Aadhaar for e-KYC and other purposes. The ordinance, “Allows the use of Aadhaar number for authentication on voluntary basis as acceptable KYC document under the Telegraph Act, 1885 and the Prevention of Money-laundering Act, 2002.”
The truth is the government seems to be under pressure from private entities, especially from finance and telecom sector to allow them use of Aadhaar eKYC for onboarding of customers.
The Supreme Court, in its judgement dated 26 September 2018, in Justice KS Puttaswamy vs Union of India (the Aadhaar judgement) in WP Civil No. 494 of 2012 explicitly prohibited use of Aadhaar by private parties by declaring Section 57 of the Aadhaar Act, 2016, as unconstitutional. This Section had provided grounds for Aadhaar-based authentication by private entities like telecom and insurance companies. 
At that time, legal scholar Dr Ramanathan had pointed out that after the judgement of the apex court, the use of the Aadhaar system by private and business interests should be prohibited. "Using 'voluntary' and 'consent' as a cover does not make it right. In Para 367 of the majority judgment, the judges had only said, 'if such a person voluntary wants to offer Aadhaar card as a proof of his/her identity, there may not be a problem'. That does not allow the use of the Aadhaar system, not even voluntarily," Dr Ramanathan had said. 
However, before being banned by the apex court, when private entities were using Aadhaar-based e-KYC, there were several reports of fraudulent transactions and scamming of citizens' personal data as well as their money. 
In fact, last month, even the Insurance Regulatory and Development Authority of India (IRDAI) has directed insurance companies not to mandatorily ask for the Aadhaar details for know-you-customer (KYC) requirement or carry out authentication using e-KYC from UIDAI. 
In a circular (IRDAI/SDD/ClR/MISC/020/01/2019) issued on 29 January 2019, the insurance regulator had said, "The proposer or policyholder voluntarily offers Aadhaar as one of the documents for KYC purpose. This includes physical copy of e-Aadhaar, masked Aadhaar and offline Aadhaar XML. However, the insurers will under no circumstances do the authentication either using e-KYC facility or yes/no authentication facility of UIDAI. Insurers should ensure that the first 8 digits of the Aadhaar number are properly/appropriately masked. At no point in time, more than last four digits of the Aadhaar number of any individual should be stored by the insurers in physical or digital form". (Read: Aadhaar: Insurance Companies Cannot Ask for the UID for KYC, Says IRDAI  https://www.moneylife.in/article/aadhaar-insurance-companies-cannot-ask-for-the-uid-for-kyc-says-irdai/56356.html)
Earlier while speaking at Moneylife Foundation event on “Why We Need to Worry about the UID (Aadhaar) Project", Dr Ramanathan had termed Aadhaar as an attempt to turn every one into a customer. “These days, we often hear the term ‘disruptive change’. However, in the case of UID, this is disruption for destruction, where ambitious persons are using every means to allot a random number to every Indian citizen whose profiles, once created, can be exploited for offering a number of services or products,” she had said. (Read: “Aadhaar is an attempt to turn everyone into a customer”
Last year in April, Siddharth Sekhar Singh and Ashwini Chhatre from Indian School of Business (ISB) did a study to find out Aadhaar authentication failure in PDS of Andhra Pradesh. "It should be understood that the Aadhaar authentication system is not a 100% accurate system, irrespective of the modality selected for authentication. Aadhaar authentication attempts may result in failure due to several reasons. Several reasons were identified for the failure of Aadhaar authentication, including biometric mis-match, invalid Aadhaar number, invalid biometric status and missing biometric data in Central Identity Data Repository (CIDR). Among these, about 92% of the authentication failures were caused solely due to biometric mismatch(92%), placing it as the leading cause of authentication failure in the state," the study says.
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Aditya G
5 years ago
This is absolutely bollocks! Why isn't there outrage over this?
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