New Delhi: The Cabinet on Wednesday cleared a Bill to allow voluntary use of Aadhaar as identity proof for opening bank accounts and procuring mobile phone connections.

The Bill — which will be in form of amendment to Aadhaar Act 2016 and will replace an ordinance issued in March, 2019 — also proposes stiff penalties for violation of norms.

The Aadhaar and Other Laws (Amendment) Bill, 2019 will be introduced in the ensuing session of Parliament, beginning June 17.

"For the convenience of general public in opening of bank accounts, the proposed amendments would allow the use of Aadhaar number for authentication on voluntary basis as acceptable KYC (Know Your Customer) document under the Telegraph Act, 1885 and the Prevention of Money Laundering Act, 2002," an official release said.

Put simply, this means it will allow voluntary use of Aadhaar number for authentication and identity proof in opening of bank accounts and procuring of mobile phone connections.

The Bill seeks to giving a child an option to exit from the biometric ID programme on attaining 18 years of age, while stipulating stiff penalties for violation of norms set for the use of Aadhaar and violation of privacy. "The decision would enable UIDAI (Unique Identification Authority of India) to have a more robust mechanism to serve the public interest and restrain the misuse of Aadhaar...Subsequent to this amendment, no individual shall be compelled to provide proof of possession of Aadhaar number or undergo authentication for the purpose of establishing his identity unless it is so provided by a law made by Parliament," the release said.

The move is aimed at making Aadhaar "people friendly", it added. The amendments proposed are the same as those contained in the Ordinance promulgated by President on March 2, 2019. The changes provide for voluntary use of Aadhaar number in physical or electronic form by authentication or offline verification with the consent of Aadhaar number holder. It will also pave the way for use of alternative virtual identity number to conceal the actual Aadhaar number of an individual.

It seeks to permit entities to perform authentication only when they are compliant with the standards of privacy and security specified by the UIDAI and the authentication is permitted under any law made by Parliament or prescribed to be in the interest of state by the central government.

It proposes deletion of section 57 of the Aadhaar Act relating to use of the biometric identifier by private entities. The amendment will also prevent denial of services for refusing to, or being unable to, undergo authentication.

Besides this, the proposed amendments provide for establishment of Unique Identification Authority of India Fund, and confers enhanced regulator-like power on the UIDAI to give directions as it may consider necessary to any entity in the Aadhaar ecosystem.

The changes proposed include a civil penalty of up to ₹1 crore on entities that violate the provisions of the Aadhaar Act, with an additional fine of up to ₹10 lakh per day in case of continuous non compliance. Unauthorised use of identity information by a requesting entity or offline verification seeking entity would be punishable with imprisonment of up to three years with a fine that may extend to ₹10,000 or in case of a company with a fine of up to ₹1 lakh. Punishment for unauthorised access to the Central Identities Data Repository as well as data tampering is proposed to be extended to 10 years each from the current three years.

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