The Ministry of Finance has authorised the Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI)-which also performs the functions of the Central KYC Records Registry (CKYCR)-to use Aadhaar authentication for identity verification.
The notification, issued under Section 4(4)(b)(ii) of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016, allows the use of Aadhaar numbers for establishing identity during KYC verification. The move comes following consultations between the Ministry of Electronics and Information Technology and the Unique Identification Authority of India (UIDAI).
According to the Gazette notification (S.O. 5034(E)), the use of Aadhaar aims to make the receipt of subsidies, benefits, and services more seamless, eliminating the need for multiple identity documents, and promoting efficiency and good governance through digital platforms.
The notification specifies that Aadhaar authentication for KYC purposes will be voluntary, ensuring individuals' consent remains central. The CKYCR must inform Aadhaar number holders about alternative identification options such as:
- Passport
- Driving Licence
- Voter ID
- Job Card under MGNREGA (duly signed by a State Government officer)
- Letter issued by the National Population Register containing name and address details
The Gazette further clarifies that no service shall be denied to individuals unwilling or unable to undergo Aadhaar authentication.
The move enables regulated entities under the Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority of India (IRDAI), Pension Fund Regulatory and Development Authority (PFRDA), and International Financial Services Centres Authority (IFSCA) to authenticate Aadhaar details for demographic verification under the Prevention of Money Laundering Act (PMLA), 2002 through an eKYC facility.
By integrating Aadhaar authentication into the Central KYC system, the government aims to further curb financial fraud, simplify compliance, and enhance customer experience across financial services.
Official copy of the notification has been attached
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