Aadhaar Based Transactions By Axis Bank Have Been Banned By UIDAI For Misusing Biometric Data

Axis Bank, which is India’s 3rd largest private bank, has received a major set-back and a big blow to its reputation because UIDAI has banned all Aadhaar based transactions on their platform. This is a temporary ban, executed because of misusing biometric data and carrying on illegal transactions using Aadhaar data.

Besides Axis Bank, UIDAI is also investigating Suvidha Infoserve & eMudhra for the same charges. All Aadhaar based transactions have been temporarily put on hold for these three entities.

A statement from Axis Bank said, “At this juncture, we can categorically state that there has been no violations/breach at the bank’s end. We have suspended services to Suvidhaa as of now,”

Misuse of Aadhaar Data Or A Big Scam?

Earlier this month, The Unique Identification Authority of India or UIDAI, the central authority for implementing Aadhaar card usage across the nation, filed criminal cases against Axis Bank, Suvidha Infoserve & eMudhra for violating rules pertaining to Aadhaar card usage, and misusing sensitive biometric data of Indian citizens, without following the rules.

In the complaint, it was revealed that using one single biometric identification of an individual, a total of 397 Aadhaar transactions were performed between July 14th, 2016 and February 19th, 2017. Out of 397 transactions, 194 were carried via Axis Bank, 112 via eMudhra and 91 through Suvidha Infoserve.

Last year in September, we had reported that under Aadhaar Act 2016 (Targeted Delivery of Financial, and Other Subsidies, Benefits and Services), misusing Aadhaar data is a criminal offence, which can carry both jail term and heavy fine.

As per an official from UIDAI, as of now, around 32 million transactions have been successfully processed using Aadhaar-based payment services, and not a single complaint have been found regarding misuse of data. This case pertaining to Axis Bank and others is the first instance when such an irregularity has been discovered, and proper investigation is right now underway to determine its source.

Suvidha Infoserve has issued a statement, which claims that these transactions using the same biometric data were done for testing purpose, and there is no wrong doings associated with it.

Interestingly, last year during the demonetization drive, several Axis Bank officers and managers were arrested by Enforcement Directorate, on charges of money laundering and illegally converting black money into white using forged documents. Does misuse of Aadhaar data originates from these cases?