Government is exploring making the biometric UID (Aadhar) mandatory for carrying out stock-market transactions, according to junior Finance Minister Namo Narain Meena.
The Unique Identification Authority of India (UIDAI), headed by former Infosys CEO Nandan Nilekani, has suggested constituting a joint working group of Securities and Exchange Board of India (SEBI) and the Authority to work out the modalities, he said.
The ‘Aadhaar’ number will be used as a proof of address and proof of identity under SEBI’s Know Your Client (KYC) norms. Currently, the SEBI relies on the Permanent Account Number or PAN, but many investors cheat the system by taking multiple PAN’s.
Aadhar is more difficult to be manipulated due to the ‘live’ nature of the system and the built-in biometric aspects. The number is linked to a set of ten finger prints and iris scans and eliminates duplicate entries using state of the art software.
The Unique Identity number will eventually form the basic, universal identity infrastructure over which Registrars and Agencies across the country can build their identity-based applications, Meena said.
Government of India in December 2010 notified “Aadhaar” number issued by UIDAI as an officially valid document to satisfy KYC norms for opening of accounts with banking companies, financial institutions and intermediaries.
SEBI has constituted an internal group with members from various departments to examine the modalities for making UID applicable for KYC norms and to formulate their views.