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UIDAI Directs Firms to Pay Rs 20 for Using Aadhaar E-KYC: Facts to Know

On Feb 28, the government had passed an ordinance to allow voluntary use of Aadhaar for KYC, providing a breather for the banking and telecom sector. This move is a follow-up to the announcement.

The Aadhaar- based Know Your Customer (KYC) is a process through which banks and businesses get vital information like identity and addresses of their clients. The process ensures that a client does not misuse the services in any way and that the business houses are dealing with the right person.

Using the Aadhaar services had made the KYC process much easier for all parties concerned while also cutting down the fee they had to pay earlier. However, under the new gazette notification of the Unique Identification Authority of India (UIDAI) the customer verification process will no longer be free for business houses.

Speaking to the Press Trust of India (PTI), a UIDAI official said, “The entities have been incurring a cost of Rs. 150-200 per KYC sans Aadhaar. They have been demanding to use Aadhaar-based authentication and KYC services on account of these being convenient to them and their customers and also the fact that they will save huge amount which they currently incur in doing KYC through traditional means such as paper, physical verification, etc.”

Here is how much the Aadhaar KYC verification will cost businesses now and a few other rules that you must know about:

Representative image. Source: BMN Network/ Flickr.

1. Although still much cheaper than the traditional means of KYC verification, the Aadhaar based process will cost Rs 20 for each customer verification and 50 paise for the authentication of each transaction carried out by the entities.

2. Both these costs are inclusive of taxes and are liable for each “Yes” and “No” authentication transaction.

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3. Government entities, scheduled commercial banks and the department of posts are exempted from these charges.

4. According to the UIDAI notification, the business houses are required to deposit the transaction charges within 15 days of issuance of the invoices concerned. A delay in the payment beyond 15 days will attract an interest compounded at 1.5 per cent per month.

5. Along with this, the authentication and KYC services will also be discontinued for those businesses who fail to make the payment on time.

Representative image. Source: FinFYI/ Facebook.

6. The UIDAI official also said that with the new amendments made through the Aadhaar ordinance, many new entities may now be eligible to use the services. This will be possible only if they meet the conditions under the Aadhaar Act and related regulations.


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7. “Therefore, it is just, fair and reasonable that such entities should contribute to meet expenses nominally which are incurred by UIDAI in providing these services,” the official told the PTI.

8. If a business wishes to discontinue the Aadhaar processes KYC, they are free to do so. “However, the transaction charges as applicable till the date of de-activation of access to authentication services shall have to be paid,” said the official.

9. You can visit the UIDAI website by clicking the link here to know more.

(Edited by Saiqua Sultan)

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