After SC rulings on Aadhaar, govt assures private firms to provide legal support

The Supreme Court’s ruling on Aadhaar on Thursday gave a blow to private bodies like telecom companies, fintech firms, private banks, and other such firms that they cannot ask for biometric and other data from consumers for their services.

After the judgment, reactions from fintech companies started pouring in. Almost all the companies welcomed the Supreme Court’s rulings on Aadhaar’s constitutional validity. However, they highlighted some of the flaws in Aadhaar law due to which private companies have been barred from using Aadhaar for identity verification.

They expressed dissatisfaction over the ruling as it may affect the fintech as well as other financial companies which uses the only Aadhaar as their identity verification mechanism. According to them, it was a regressive move for fintech companies as they will eventually move to the traditional mode of verifying individuals and thereby the turnaround time for processing the loan will increase to a considerable extent.

The decision didn’t only affect the private bodies but government too which has been pushing the use of Aadhaar in every sector.

The government, however, has assured private companies that it plans to give it legislative support. The finance minister Arun Jaitley’s rationale behind it was that in the case of prohibited areas, it shouldn’t be assumed that it is perpetually prohibited. They could be procedurally prohibited or prohibited as such.

Ravi Shankar Prasad, Union Minister for Electronics and IT, law and justice, said that the court had struck down only a portion of Section 57 that referred to contracts and urged the fintech industry not to “panic” over the ruling.

According to Unique Identification Authority of India (UIDAI) CEO Ajay Bhushan Pandey by disallowing the disclosure of Aadhaar data on national security grounds, barring its use by private companies without the backing of law and prohibiting illegal immigrants from getting a UID number, Aadhaar had been strengthened. He called the judgement a victory for Aadhaar.

The development was first reported by ET.