How Supreme Court Aadhaar verdict may delay KYC for payment wallets, telcos, banks, mutual funds

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Published: September 27, 2018 10:44:28 AM

After Supreme Court on Wednesday declared Section 57 of the Aadhaar Act unconstitutional, getting new customers on board would become costlier for firms in services sectors such as telecom, banking, mutual funds, credit cards, payment wallets.

aadhaar cardAadhaar verdict: The companies functioning in these sectors are expected to be impacted by the Supreme Court’s decision both in terms of rise in cost of acquiring new customers and slowing down of their KYC timelines.

Aadhaar card verdict: After Supreme  Court on Wednesday declared Section 57 of the Aadhaar Act unconstitutional, getting new customers on board would become costlier for firms in services sectors such as telecom, banking, mutual funds, credit cards, payment wallets. The companies functioning in these sectors are expected to be impacted by the Supreme Court’s decision both in terms of rise in cost of acquiring new customers and slowing down of their KYC timelines, company experts said.

“We cannot stop on-boarding of customers and will have to go back to the older procedures. There will be a significant cost element attached to it as Aadhaar-based eKYC costs 85 per cent lesser than physical KYC process,” the official said, on condition of anonymity,” The Indian Express reported citing unidentified executive at a leading mobile firm.

On being asked about the possibility that the mobile operators would have to shift back to the physical KYC procedure now, an unidentified senior government official indicated to The Indian Express about formulation of fresh law which would allow telecom operators to conduct eKYC.

“Currently we are in the process of reading the judgement and checking for any fine prints. While Supreme Court has passed its judgement we will await for RBI’s circular on the issue and the way forward,” an unidentified senior executive at a top private sector bank told The Indian Express.

“Lot of businesses were looking at Aadhaar-based eKYC and fast-track the KYC process. User enterprises such as telecom operators and banks that were trying to fast-track the timeline through eKYC will definitely be impacted. So the acceleration and KYC and cost-savings will not be possible now. The fintech opportunity came from there to integrate with Aadhaar and build solutions on the Aadhaar stack with Aadhaar as a platform,” Rama Vedashree, CEO of Data Security Council of India told The Indian Express.

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