The Department of Revenue on May 9, 2019 issued a circular laying down procedure for processing of application of Aadhaar authentication under Section 11A of the Prevention of Money-Laundering Act, 2002 (PMLA) by Non-Banking Companies.
A banking company under section 11A of the PMLA can carry out authentication of the client’s Aadhaar number using e-KYC facility provided by Unique Identification Authority of India (UIDAI). However, for carrying out authentication by any non-banking company, a notification by the Central Government is required, and such permission will be granted only after the satisfaction of the appropriate regulator and UIDAI regarding the
credentials of the reporting entity.
Following steps are issued for carrying out authentication of client’s Aadhaar number by a non-banking company:
i. An application may be made before an appropriate authority by concerned entity under section 11A of the PMLA.
ii. The regulator will consider and examine the application and ensure whether all the conditions specified under section 11A are fulfilled. If the regulator finds authentication to be necessary and expedient, it shall forward the application to UIDAI along with its recommendations.
iii. UIDAI will consider and analyze the each application on the basis of various standards of privacy and security specified and may after the examination, forward the application to Department of Revenue along with its recommendations and conditions.
iv. The Central Government may issue a notification authorizing the applicant to carry out authentication, upon being satisfied on the recommendations tendered by the regulator and UIDAI.
v. UIDAI, on the basis of the notification, will provide necessary authorization to the applicant for carrying out the authentication.
Further, it is also requested to UIDAI to set up a mechanism for ensuring the
compliance by the reporting entities and to carry out suspension and cancellation of the permission for any violation or default.
To read the full notification Click here
