Cardless Loans Against Aadhaar

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Cardless Loans Against Aadhaar

Ahead of their annual flagship sale events, Flipkart and Amazon have announced the use of Aadhaar for granting credit — a move that some lawyers say is in violation of the Supreme Court’s recent verdict that disallowed private entities from using the national identity platform.

Both e-commerce giants, in a bid to push sales, are offering instant credit without credit/debit card, but with the use of the Aadhaar ID number.

These instant loans are being offered to persuade users who abandon a filled e-cart — for lack of sufficient cash in hand or credit — to go ahead with their purchase.

This interest-free credit access of up to Rs 60,000 can be availed of via Flipkart and Amazon’s respective mobile apps. On signing up, customers can see how much credit has been approved after entering their PAN and Aadhaar numbers. The approved amount will depend on the consumer’s shopping pattern and payment history on these platforms.

Lawyers that TOI spoke to said the scheme is in direct violation of the SC verdict. Former additional solicitor general of India, P Wilson, said that the SC verdict is very clear and there can be no justification for private companies asking for such details.

Ramesh Kumar, who runs the law firm Ramesh Kumar & Associates, said companies cannot ask for Aadhaar details for any scheme on their platform.

“The SC verdict clearly bars the use of the Aadhaar database by private companies. Which brings up the question: Why can’t UIDAI bar access for these players?” he said. It’s technically possible for UIDAI to do that, considering that last December, it had temporarily barred Aadhaar database access for Airtel.

When contacted, a Flipkart spokesperson said that the company is committed to being fully compliant with the extant laws and judgments of the Supreme Court. An Amazon India spokesperson said complying with local regulations is a top priority for the company worldwide.

(Except for the headline, this story has not been edited by Daily Report and is published from ET TECH.)

 

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