The government has allowed 22 financial companies, including Amazon Pay (India) and Hero FinCorp, to undertake Aadhaar-based authentication of clients.

According to the latest notification by the Finance Ministry, the reporting entities under the Prevention of Money Laundering Act (PMLA) will be able to verify the identity of customers and beneficial owners’ details using their Aadhaar numbers.

It includes companies like Godrej Finance, Amazon Pay (India) Pvt Ltd, Aditya Birla Housing Finance, Tata Motors Finance Solution, IIFL Finance, and Mahindra Rural Housing Finance Ltd.

Nangia Andersen LLP Partner Sandeep Jhunjhunwala said that while Aadhaar authentication of clients is made available as one of the modes of verification for banking companies, the PMLA provides that Aadhaar authentication can also be adopted by reporting entities other than banking companies as may be notified by the Central government.

“Accordingly, the CG has notified a list of 22 financial institutions/intermediaries, which are permitted to use Aadhaar authentication to verify the identity of clients/ beneficial owners,” Jhunjhunwala said.

The other modes of verification prescribed under the Money Laundering Act include offline verification under the Aadhaar Act, use of a passport and any other officially valid document or modes of identification as may be notified by the Central government, and the client has a voluntary choice to opt for the mode of verification.

Also read: What is Aadhaar Enabled Payment System — AePS

“In the interest of safeguarding the identity information and authentication records of individuals, the Money Laundering Act prohibits reporting entities from storing the Aadhaar number or core biometric information of the client, where Aadhaar is used to verify identity,” Jhunjhunwala added.

Aadhaar-issuing body UIDAI recently launched a feature wherein residents can verify their email and mobile number linked to their Aadhaar.

Related Topics
comment COMMENT NOW