Home Fact-Check Some facts you need to know about the newly introduced charges for Aadhaar based e-KYC authentication

Some facts you need to know about the newly introduced charges for Aadhaar based e-KYC authentication

The charges are payable by organisations using e-KYC, not end consumers

On 8th March, several people started spreading a piece of news on social media saying that the government has introduced charges for using the Aadhaar based e-KYC service offered by Unique Identification Authority of India (UIDAI). It was being informed that each e-KYC inquiry will be charged at ₹20, and each Yes/No authentication will be charged at ₹0.50. Many people said that these charges will be payable everywhere since Aadhaar authentication will be required at every monetary transaction in the near future.

Although the news about the charges for e-KYC verification is correct, it omits some important points about the rule which creates baseless panic among people.

Many people are assuming that these amounts will be charged from end users when they are required to use Aadhaar based e-KYC authentication to avail any service. But the fact is, these are the charges that UIDAI will collect from institutions that use the e-KYC service, and does not necessarily mean that end-users will have to bear that cost. Institutions may absorb the cost themselves or they may pass on the cost to consumers, that will depend on the decision of institutions and also on market forces.

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The most important point is, several organisations are exempt from paying the charge. According to the Gazette notification issued by the government of India, Government offices and post offices are exempted from Aadhaar Authentication transaction charges. Scheduled Commercial Banks are also exempt from the charge, if they are providing Aadhaar enrolment and update facilities. But such banks will have to fulfil their enrolment and update targets to avail this exemption.

Gazette notification on e-KYC verification charges

The private companies that use e-KYC facility of UIDAI will have to pay the specified charges for using the facility. When such companies use manual varication process instead of using the e-KYC, then also they spend a significant amount on verifying consumer details. They do not charge any amount from the consumer for such verification, so it is wrong to assume that companies will start charging the e-KYC verification amount from consumers.

Moreover, even if some companies decide to charge the amount from consumers, people have the option to not use e-KYC. The government has clarified that Aadhaar can be used as KYC on a voluntary basis under the Telegraph Act and PMLA rules. Anyone not offering Aadhaar cannot be denied any service, be it opening of a bank account or obtaining a mobile phone SIM card. People can opt for using conventional KYC instead of Aadhaar based e-KYC, and such people can’t be denied service for the same.

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