COAI to examine implications of SC verdict on Aadhaar linkage with mobile connections

Cellular Operators' Association of India (COAI) Wednesday said it will examine and assess implications of the Supreme Court judgement, which states that it will not be mandatory for customers to link Aadhaar for mobile connections and bank accounts.

The apex court Wednesday struck down the Section 57 of the Aadhaar (Targeted Delivery of Financial and other Subsidies, Benefits and Services) Act, 2016 that permitted private entities like telecom companies or other corporates to avail of the biometric Aadhaar data.

"We respect the Aadhaar verdict of the Hon'ble Supreme Court, the apex court of India. We are going to review the judgement and its implications. We shall await further orders and instructions from Department of Telecom," COAI Director General Rajan S Mathews said in a statement.

COAI member operators as always will definitely comply with the law, he added.

Rajya Sabha MP Rajeev Chandrasekhar said these strike downs "correct the grave asymmetry" that existed in the Act vis a vis the rights of citizens and accountability and powers of UIDAI.

"This judgement should reassure all citizens that Aadhaar has been put into place by this government to ensure that curse of corruption and leakages in use of public money is once in for all removed from our system," he added.

Finzy founder and CEO Amit More said the decision would also impact many fin-tech companies (including peer-to-peer lending platforms), digital banks and non-banking financial companies that rely "heavily" on Aadhaar-based eKYC verification.

Pointing out that Aadhaar Virtual ID and UID token were introduced earlier this year keeping in mind the privacy concerns, More said one would need to see the impact of the SC verdict on these additional security layers.

BankBazaar.com CEO Adhil Shetty also said clarifications are needed to figure out the exact impact of the judgement on the existing eKYC processes for opening a bank account.

"OTP-based eKYC had helped an increasing number of people access financial products over their mobile phones, increasing the penetration and reach of such products and raising levels of financial inclusion," he noted.

C V Madhukar of Omidyar Network added that private sector business models will now need to evolve in order to provide greater privacy protection to individuals, while also ensuring inclusive innovation.

Gopal Bohra, Partner at NA Shah Associates LLP said the apex court has applied a balanced approach - making mandatory use of Aadhaar at certain places such as filing of income tax return and also restricting the data sharing with private parties.

"This ruling making mandatory linking of Aadhaar with PAN will help government in curbing tax evasion," he said.