On Saturday, the department of revenue said that the finance ministry has approved 29 insurance companies and nine securities entities, including the Bombay Stock Exchange (BSE) and the National Securities Depository Limited to undertake Aadhaar authentication services under the Prevention of Money Laundering Act, subject to compliance with standard security and privacy measures as per the Aadhaar Act.
The Ministry’s Department of Revenue has authorized 29 insurance companies and nine market entities — including Bajaj Allianz Life Insurance, Bharti AXA Life Insurance, HDFC Life Insurance Company, ICICI Prudential, BSE, NSE, NSDL, Central Depository Services — to use verification services of Aadhaar and e-KYC in real-time.
An official statement quoting finance Secretary Ajay Bhushan Pandey said that the department has issued two separate notifications to authorize these entities to use Aadhaar authentication services with necessary standard security and privacy measures. This would aid in reducing the cost of the transaction by letting these entities to perform in real-time and make e-KYC (know your customer).
Further, it said, “This would also be beneficial to the customers or the investors, especially the small and retail investors, as they need not submit physical papers or documents for KYC”. Ajay Bhushan is the former CEO of Unique Identification Authority of India (UIDAI).
The ministry allowed the insurance companies and the securities market entities to use Aadhaar authentication services under the PMLA subject to the satisfaction of their regulatory authorities — the Insurance Regulatory Authority of India (IRDA) and the Securities and Exchange Board of India (SEBI) respectively that they are complying with the standard of privacy and security as per the Aadhaar Act.
By easing their KYC process and reducing cost and time, this would be too preventing money laundering activities.
Aadhaar authentication is discretional. Adhaar Authentication is not required if the investor uses Permanent Account Number.
Other securities market entities that are authorized to do Aadhaar authentication are CDSL Ventures Ltd., NSDL Database Management Ltd., NSE Data and Analytics Ltd., CAMS Investor Services Private Ltd. Computer Age Management Services Private Ltd., and Link Intime India Pvt. Ltd.