Centre weighing plan to waive Aadhaar authentication fee

The government is examining a proposal to waive Aadhaar authentication transaction charges levied on banks by the Unique Identification Authority of India (UIDAI).

The move comes after both public and private sector lenders urged the UIDAI to waive such charges for almost a year up to June 2021, in line with the waiver granted for March-June 2020.

A senior executive said the finance ministry is expected to take up the issue with both the electronics and information technology ministry and UIDAI. “It is being examined if a one-time relief can be provided for the period. The Indian Banks’ Association has also sought such relief,” said the executive, who did not wish to be identified.

At present, banks are exempted from paying authentication charges but if they fall short of Aadhaar enrolment targets, they are charged in proportion to the shortfall in achieving the target.

Aadhaar authentication charges are Rs 20 for each know your customer (KYC) transaction and Rs 0.50 for each Yes/No authentication transaction.

“Banks have argued that they were not able to meet Aadhaar enrolment or updation targets by Aadhaar Seva Kendras due to Covid-19 pandemic,” said an official aware of the matter.

Banks are mandated to set up Aadhaar enrolment and update facilities inside the bank premises. The target for 20-21 was 14,349 enrolment centres. This was revised after the government announced the merger of 10 public sector banks (PSBs) into four big ones in August 2019, bringing down the number of PSBs in the country to 12 from 27.

“The UIDAI has already revised the target to eight transactions per day per branch considering the present pandemic situation. We don’t think these are difficult numbers to achieve,” said the official, who spoke on condition of anonymity.

The financial disincentive for not achieving this is a fine of ₹20,000 per branch.

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