NSDL shuts down Aadhaar e-sign service following UIDAI directives
New Delhi: National Securities Depository Limited (NSDL), the country’s leading depository, abruptly shuts down Aadhaar e-sign services on Thursday midnight following directives from the Aadhaar body UIDAI, the Times of India said in a report. eSign is an online electronic signature service that can facilitate an Aadhaar holder to digitally sign a document. Such e-sign signature services were supposed to aid digital transactions and verifications. But NSDL has been facing technical issues in terms of integrating different data sets, mismatches and submission of fakes, sources told the daily.
The move will impact brokerages and fintech companies as they will find it difficult to enroll new investors. Now, they have to physically visit the customer for KYC, which will increase their cost.
Earlier in November, market regulator Sebi, following an amendment to Aadhaar rules, had notified about restarting e-KYC for all its regulated entities. However, with NSDL’s latest directive, capital market entities will not be able to use e-KYC or e-signatures for documentation.
The move will also affect startups like Digio, Veri5, Khosla whose primary business model rides on Aadhaar e-sign services. The publication citing sources said NSDL had approached UIDAI for resolution of some of the issues faced by Aadhaar e-sign services.
“e-Sign was envisioned to help industrialists, investors, startups and business owners. Instead of every party being present for signing pertinent company documents or records, with e-sign one can share an agreement with co-founders or partners. One can also send joint signed statement with instructions for banks. But there have been a lot of technical glitches—and not many people adopted e-signatures,” the ToI report quoted a source with NSDL as saying.
