Notification S.O. 2668(E). dated 27.05.2026
The Central Government has issued a notification permitting Bima Sugam India Federation (BSIF) to undertake Aadhaar authentication for customer verification and Know Your Customer (KYC) purposes under the Prevention of Money-laundering Act, 2002 (PMLA).
The permission has been granted after consultation with the Unique Identification Authority of India (UIDAI) and the Insurance Regulatory and Development Authority of India (IRDAI).
1. Aadhaar Authentication Permitted for Customer Verification and KYC
Pursuant to the notification, BSIF has been authorised to use Aadhaar authentication for:
- Customer verification
- Know Your Customer (KYC) compliance
- Identity verification for purposes of compliance under the Prevention of Money-laundering Act, 2002
The measure is intended to facilitate secure and efficient onboarding and verification of customers.
2. Permission Granted Under PMLA Framework
The notification enables Aadhaar authentication for compliance-related requirements under the anti-money laundering framework, including customer due diligence obligations applicable to reporting entities.
The authorisation is linked to compliance under the Prevention of Money-laundering Act and related KYC requirements.
3. Consultation With UIDAI and IRDAI
The Government has clarified that the permission was granted after:
- Consultation with the Unique Identification Authority of India (UIDAI); and
- Consultation with the Insurance Regulatory and Development Authority of India (IRDAI)
The consultations were undertaken to ensure regulatory alignment and appropriate safeguards in use of Aadhaar-based authentication.
4. Compliance With Aadhaar Privacy and Security Standards
Before granting approval, the Government confirmed compliance with prescribed Aadhaar privacy, security and data protection standards.
The permission is therefore subject to adherence to safeguards relating to secure use, storage and processing of Aadhaar-related information.
5. Objective of the Notification
The notification aims to facilitate faster, secure and efficient customer verification processes for BSIF while strengthening compliance with KYC and anti-money laundering requirements.
The move is expected to support streamlined onboarding and identity verification while maintaining safeguards relating to privacy, data security and lawful use of Aadhaar authentication.
Click Here To Read The Full Notification
The post Government Allows BSIF to Use Aadhaar Authentication for KYC appeared first on Taxmann Blog.
