Finance Ministry permits 22 finance companies to undertake Aadhaar-based verification of clients

The Finance Ministry has issued a notification on Friday allowing 22 financial companies to undertake Aadhaar-based authentication of clients. In its notification the Ministry said that these companies that are already reporting entities under the PMLA, will be able to use Aadhaar credentials to verify the identity and details of clients and beneficial owners. These 22 financial companies include Godrej Finance, Amazon Pay (India) Pvt Ltd, Aditya Birla Housing Finance, Tata Motors Finance Solution, IIFL Finance, Mahindra Rural Housing Finance Ltd, Uniorbit Payment Solutions Limited, and V Creditline Limited.

Nangia Andersen LLP Partner Sandeep Jhunjhunwala told PTI that while Aadhaar authentication of clients is made available as one of the modes of verification for banking companies, the Prevention of Money Laundering Act (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," he told PTI.

"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," he added.

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.

Financial companies permitted to undertake Aadhaar-based authentication

1) Godrej Finance Limited
2) Paul Merchants Finance(P) Ltd.
3) Svatantra Microfin Pvt Ltd.
4) Svatantra Micro Housing Finance Corporation Limited
5) Tata Motors Finance Solution Limited
6) Uniorbit Payment Solutions Limited
7) Subhlakshmi Finance Private Limited
8) Hero FinCorp Limited (HFCL)
9) SV Creditline Limited
10) Branch International Financial Services Limited
11) Mahindra Rural Housing Finance Ltd
12) Light Microfinance Private Limited
13) Belstar Microfinance Limited
14) IIFL Finance Limited
15) Hinduja Leyland Finance Limited
16) JMJ Fintech Limited
17) Midland Microfin Limited
18) Riviera Investors Private Limited
19) Save Microfinance Private Limited
20) Share India Fincap Private Limited
21) Amazon Pay (India) Private Limited (APIPL)
22) Aditya Birla Housing Finance Limited