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Govt seeks legal opinion on the validity of Aadhaar-based eSign Services

New Delhi, December 13: The Union Government has sought legal advice on the validity of eSign services from the Ministry Of Law and Justice.

To make the process of signing a document less cumbersome, in 2015, the government launched the eSign project. eSign is an online electronic signature service which facilitates an Aadhaar holder to digitally sign a document within seconds. Keeping that in mind, eMudra Limited, a leading certifying firm in the country launched eSign services. This service is legally valid under the Information and Technology (IT) Act, 2000.

A recent court order stated that even though eSigning comes under the purview of the law, it cannot be used for the contract by any private party. Keeping that in mind, the government has directed eSign service providers such as eMudhra, Capricorn Identity Services and (n)Code Solutions to explore alternative options to use offline Aadhaar system to verify customers’ credentials.

The Controller of Certifying Authorities (CCA) has asked the empanelled services to use offline Aadhaar to verify the identity of users. The two-factor authentication system includes the One Time Password (OTP) sent to the verified mobile and PIN set by the applicant. After the completion of KYC, the subscriber chooses a user ID and a provision is created for an eSign address. On the other hand, the offline Aadhaar system will be based on capturing demographics through offline Aadhaar and authenticating using OTP.

The Reserve Bank of India (RBI) is also looking at various alternative methods of enabling offline Know-your-Customer (KYC) verification. Two weeks ago, CCA also released guidelines on alternative ways to do e-KYC which included options for offline Aadhaar along with the use of different identity-based system hinging on two-factor authentication by the applicant.

According to signdesk.com, possible alternatives could be USB token-based signatures, offline Aadhar XML based signatures and bank KYC based eSign.

Industries like FMCG, Banking, Finance, Insurance, and even Human Resource departments in various companies have integrated eSign to digitize documentation workflows making them dependant on electronic signatures.

For now, eSign providers have halted their services to comply with the Supreme Court’s August ruling on Aadhaar data privacy.

The final decision on this matter is expected to come in a month’s time

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