The Finance Ministry has given the green light to 15 securities firms to use Aadhaar for customer verification, according to a recent notification from the Revenue Department. The approved firms include well-known names like SBICAP Securities, IIFL Securities, and Angel One. This permission allows these companies to use Aadhaar numbers for the Know Your Customer (KYC) process, which is crucial for preventing financial fraud.

The move is part of a larger effort to strengthen the Prevention of Money Laundering Act (PMLA) and prepare for an upcoming review by the Financial Action Task Force (FATF), which monitors global anti-money laundering practices. In 2023, the Ministry of Electronics and IT (MeitY) suggested expanding Aadhaar verification to more private companies to enhance digital identity use.

Previously, in 2019, the Aadhaar Act was amended to limit the use of Aadhaar for KYC purposes to banks and telecom companies. This change followed a Supreme Court ruling that found certain provisions of the Aadhaar Act unconstitutional. The court had previously allowed private companies like Paytm and Airtel Payments Bank to use Aadhaar data, which was later challenged.

The latest proposal aims to allow private companies and state governments to use Aadhaar authentication to improve access to services and make life easier for residents. This is part of broader reforms to address potential gaps in the anti-money laundering framework.