Government Allows BSIF to Use Aadhaar Authentication for KYC

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  • Last Updated on 29 May, 2026

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BSIF Aadhaar Authentication for KYC

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

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied