The Union cabinet on Monday cleared a proposal to amend two existing laws to provide legal backing for voluntary seeding of Aadhaar with mobile numbers and bank accounts, sources said.
The cabinet meeting chaired by Prime Minister Narendra Modi approved amendments to the Telegraph Act and the Prevention of Money Laundering Act (PMLA) after the Supreme Court (SC) in September imposed restrictions on the use of Aadhaar by private companies.
Sources said the two acts will be amended to provide for voluntary sharing of the 12-digit Aadhaar number for obtaining new mobile phone connections and for the opening of bank accounts.
The SC had struck down Section 57 of the Aadhaar Act that had made seeding of the biometric ID with SIMs and bank accounts mandatory, saying it had no legal backing.
To overcome this lacuna, the Telegraph Act is being amended to provide legal backing for the issuance of mobile SIMs through Aadhaar.
Similarly, the amendment to the PMLA will give individuals option to link their bank accounts to Aadhaar in the KYC option.
The top court had in a landmark judgment held the constitutional validity of Aadhaar only for distribution of state-sponsored welfare subsidies but ruled that it cannot be made mandatory for opening bank accounts or providing mobile phone connections.
Its verdict came in response to petitions by activists and lawyers citing privacy concerns.
The government had allayed fears of mass deactivation of mobile numbers verified using Aadhaar identification in October and said it is entirely voluntary for customers to re-verify their numbers with a valid alternative document.
It clarified that the mobile numbers would continue to work even if the subscriber chose not to get it re-verified using some other government-approved identification.
However, the government pointed out that SC has prohibited the issue of new SIM cards through Aadhaar e-KYC authentication due to lack of a law.
The clarification came in the wake of speculations that the recent SC verdict barring private entities from using the 12-digit biometric identification for authentication meant that the 50 crore mobile numbers verified using Aadhaar, or half of the mobile SIMs in the country, would be disconnected.
Conceptualised under the previous UPA regime in 2009, under the extraordinary Aadhaar programme, the document provides every resident a biometric ID by assigning a unique 12-digit identification number after collecting their biometric data and photographs.
It was envisioned as a cost-saving tool that could improve the delivery of services and subsidies to poor by eliminating bogus beneficiaries and checking leakages of funds due to corruption.