You can now take insurance plan from select companies and invest in stock markets with Aadhaar number. The Finance Ministry has allowed 29 insurance companies and 9 security entities to take Aadhaar number under UIDAI from clients for authentication and for the purpose of KYC (know your customer).
These companies can use Aadhaar authentication services of the UIDAI to complete the verification process which means that investors or customers don’t need to carry a hardcopy of their Aadhaar card to complete the process. Notably, the finance ministry has approved this for only 29 insurance and 9 stock market entities.
Those who have been given the permission will also have to the legality of the clients’ personal information for privacy and security reasons, according to Aadhaar Act. These entities also have to make sure that they satisfy the standards of the Insurance Regulatory and Development Authority of India (IRDA) and the Securities and Exchange Board of India (SEBI).
Which stock market entities have been given permission?
The stock market entities that have gotten the approval are Bombay Stock Exchange, NSE Data and Analytics, National Securities Depository Ltd, Computer Age Management Services, CDSL Ventures, Link Intime India, Central Depository Services ( India) Ltd, NSDL Database Management and CAMS Investor Services.
Which insurance companies are included?
There are 20 private life insurance companies, 3 standalone health insurance companies namely Manipal Cigna Health Insurance, Religare Health insurance and Apollo Munich Health insurance and 6 general insurance entities namely Future Generali India Insurance, HDFC Ergo General Insurance, Kotak Mahindra General Insurance, Acko General Insurance, SBI General Insurance, and Royal Sundaram General Insurance. All of these are now allowed to carry Aadhaar number based verification.
The decision was taken in order to curb money laundering and has been initiated under section 11A of Prevention of Money Laundering Act of 2002. The decision has also been taken to reduce transaction costs as e-KYC would be put to real-time use.