Aadhaar can do little to check bank frauds: SC tells Centre

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NEW DELHI, April 5: The Supreme Court today disagreed with the Centre’s claim that Aadhaar is the panacea for all ills in the system, including bank frauds.
A five-judge constitution bench headed by Chief Justice Dipak Misra, which is examining the validity of Aadhaar scheme, said the biometric database is not a solution to effectively discourage bank scams, as there is no doubt about the identity of the fraudsters.
“The bank knows whom it is giving loan to and it is the bank officials who are hand in glove with the fraudster. Aadhaar can do little to stop it,” said the bench.
The SC’s observations are significant as it raps the government, which is already taking heat for the recent spate of multi-crore financial frauds plaguing the banking sector.
To name a few: diamond magnate Nirav Modi and Mehul Chowksi swindled Punjab National Bank to the tune of Rs 11,300 crore before fleeing the country; Rotomac owner Vikram Kothari “wilfully” defaulted on loans amounting to Rs 3,695 crore; jewellery exporter Dwarka Das Seth International defrauded Oriental Bank of Commerce of Rs 389.85 crore.
Previously, the Centre told the SC that in a digital era, Aadhaar is the best way to prevent “money laundering and deliver subsidies and benefits”.
The bench expressed its misgivings about the UIDAI’s power to determine what “biological attributes” should be included in the Aadhaar scheme and the method of collecting them. Citing the open-ended nature of the Aadhaar law, the bench said the govenrnment may well decide to include more and more biometric features, which could amount to “excessive delegation of powers” by Parliament.
Attorney general K K Venugopal rebutted the top court’s apprehensions and said Aadhaar has been approved by experts and was not open to judicial review as it was a policy decision.
Calling the Aadhaar Act a “fair and reasonable law”, Venugopal said the 12-digit ID has helped in dissipation of subsidees, prevention of black money and money laundering by linking it with bank accounts, he said. (Agencies)