Aadhaar case: IBA moves Supreme Court, wants to join proceedings

New Delhi: The Indian Banks’ Association (IBA) on Monday moved the Supreme Court to join the court proceedings in the Aadhaar case, strengthening the centre’s combined legal defence of the unique identification scheme for a range of purposes.

The Supreme Court has already been moved in favour of the centre by the Unique Identification Authority of India (UIDAI), the Securities and Exchange Board of India (Sebi), the Reserve Bank of India (RBI), the Telecom Regulatory Authority of India (TRAI) and at least six state governments.

On 9 October, the apex court formed a five-judge constitution bench to hear the centre’s plea seeking a modification of the court’s interim order restricting the use of the Aadhaar unique identity number only for the purposes of identifying beneficiaries of the public distribution system (PDS) and kerosene and cooking gas subsidies.

RBI had sought a clarification from the court on whether the Aadhaar number can be used by banks as customers’ proof of identification.

On 7 October, the court declined to modify the interim order—passed on 11 August— and referred all the applications by parties seeking modification and clarification of the order to a larger constitution bench.

The petition filed by IBA, an association of 210 banks and financial institutions, says that Aadhaar is at the “epicentre” of the implementation of the social benefit schemes and provisions of financial services to the weaker sections and low income group individuals of the society. “The benefits of Aadhaar cannot be deprived to people due to not being able to have documents required for establishing their identity and place of residence,” IBA said.

The central bank has issued various guidelines from time to time to banks and other regulated entities regarding voluntary use of the Aadhaar card by customers for opening bank accounts and availing other financial services.

RBI guidelines also make provisions for e-KYC (know your customer) making use of Aadhaar numbers.

Two separate references have been made to the constitution bench in the Aadhaar case—one seeking modification and clarification of the court’s interim order and the other on potential violation of privacy.

According to Abizer Diwanji, partner, head of financial services at audit and consultancy firm EY, Aadhaar has enabled a reliable and broad-based identification system, specially in rural areas where most people do not have formal cards of identification.

“Using Aadhaar enabled banks and financial institutions to roll out an easy way of doing inclusive business,” he said.

Technologies and initiatives that depend on the Aadhaar unique identity number also include biometric attendance, Jan Dhan Yojana, digital certificates, pension payments and the proposed introduction of payments banks.

However, the petitioners challenging the validity of the Aadhaar scheme have consistently argued that UIDAI, which issues Aadhaar cards, is merely an administrative unit and lacks legislative backing.

The hearings by the constitution bench are scheduled to begin on 14 October.