SC verdict on Aadhaar puts private firms in a spot

There is some hope for these companies, with Finance Minister Arun Jaitley saying there was a need for legislative backing for private companies that were using Aadhaar. Adding that a careful reading of the judgment is required, Jaitley said this could be “temporary”.

Illustration: Uttam Ghosh/Rediff.com

Financial technology (fintech) companies have voiced concerns over the Supreme Court (SC) verdict on Aadhaar that disallows private companies from using the biometric data of citizens.

They have argued that without authentication, their businesses will be disrupted.

These corporate entities have said the government needs to think about a legislation that reinstates their right to ask for Aadhaar.

Omidyar Network, which backs India Stack and funds start-ups as well as research on Aadhaar, said private companies will expect Parliament to pass a favourable law.

“The direction by the court will now require Parliament to pass laws that allow for specific uses of Aadhaar for us.

"Such parliamentary oversight is warranted and desirable,” said C V Madhukar, global digital identity initiative lead at Omidyar Network.

Madhukar said private companies will need to evolve their business models.

“As shown in the State of Aadhaar report, Aadhaar-based e-KYC (electronic-Know Your Customer) has led to greater inclusion for underserved segments and opening of millions of bank accounts.

There is some hope for these companies, with Finance Minister Arun Jaitley saying there was a need for legislative backing for private companies that were using Aadhaar. Adding that a careful reading of the judgment is required, Jaitley said this could be “temporary”.

“The prohibited areas should not assume they are perpetually prohibited,” he said.

Legal experts, however, said introducing a law to bypass the judgment might not be possible, given the court’s stern stance.

“According to the judgment, Section 57... (is an) invasion of a citizen’s privacy by the private players. Hence, it will be difficult to bring it back through legislation,” said Prasanth Sugathan, legal director, Software Freedom Law Centre.