In a welcome relief to Aadhaar holders and Aadhaar-based e-KYC Authenticating Entities alike, the Finance Ministry on Wednesday, 13th November 2019 amended the Prevention of Money Laundering Act (PMLA) to make the e-KYC process easier.
To eliminate all ambiguities surrounding ‘Digital KYC’, the Department of Revenue working under the aegis of the Union Government of India’s Ministry of Finance recently released a notification on 19th August 2019 titled ‘Prevention of Money Laundering (Maintenance of Records) Third Amendment Rules, 2019.’
Following the Hon. Supreme Court’s Aadhaar verdict in September last year that disallowed private organisations from conducting Aadhaar-based e-KYC authentication, many organisations switched back to manual, paper-based KYC in order to comply with the SC judgment.
In a landmark move, the Hon. President of India Shri Ram Nath Kovind promulgated the ‘Aadhaar and Other Laws (Amendment) Ordinance, 2019’ on Saturday, 2nd March 2019. Through this ordinance, three important acts stay amended as on date – The Aadhaar Act, 2016, The Telegraph Act, 1885 and the Prevention of Money Laundering (PMLA) Act, 2002.
As seen in our earlier blog posts on Aadhaar-based Offline KYC (here and here), most of you must be aware that UIDAI supports the initiation and completion of Offline KYC transactions through two instruments – eAadhaar and Offline KYC XML.
While enterprises can choose any of these two instruments to initiate and complete Offline KYC transactions, our experience has shown that Offline KYC XML offers more advantages than eAadhaar.
As seen in our previous post, to protect Aadhaar-based e-KYC Authentication Agencies (AUAs, KUAs and Sub-AUAs) from the adverse effects of the Hon. Supreme Court’s Aadhaar verdict, UIDAI promptly rolled out a mechanism for Aadhaar-based Offline KYC and made it available to public / private enterprises for ensuring seamless e-KYC of the end-users through a paperless and automated process.
Through it’s earlier circular on Virtual ID (VID) Implementation, UIDAI had disallowed Local AUAs to use Aadhaar Number for OTP-based e-KYC authentications. As per this circular, Local AUAs were allowed to perform OTP-based e-KYC authentications using VID only.
