Lenders Law

RBI’s recent supervisory reviews of NBFCs repeatedly highlight one area of non-compliance: Aadhaar misuse in KYC — especially accepting unmasked Aadhaar copies , failing to obtain mandatory consent , or performing unauthorised Aadhaar verification . On  9 December 2025 , UIDAI notified the  Aadhaar (Authentication and Offline Verification) Amendment Regulations, 2025  to amend the 2021 Regulations .  This blog summarises what NBFCs must do now — and what must immediately stop. Key Amendments: 1. New Definitions Introduced: (i) " Aadhaar Application" [Reg. 2(1)(ac)]-  UIDAI now defines authorised mobile/web applications — including mAadhaar, Aadhaar App, QR Scanner App, myAadhaar Portal — which alone may be used to perform offline Aadhaar verification. NBFC implication:  All offline Aadhaar verification must be done only through these UIDAI-approved apps/tools. (ii) "Aadhaar Verifiable Credential (AVC)"  [Reg. 2(1)(be)]-   A new digital do...

India’s digital transformation has streamlined the entire banking and financial services through Aadhaar, e-KYC, and video-based verification[1]. However, these systems have posed severe barriers for persons with disabilities, particularly acid attack survivors with facial/ eye disfigurements and individuals with blindness. Recognising this, the Hon’ble Supreme Court in Pragya Prasun & Ors. vs. Union of India  issued a landmark judgment on 30th April 2025, mandating inclusive reforms in KYC processes. In this regard, the Securities Exchange Board of India had earlier issued a circular no. SEBI/HO/MIRSD/SECFATF/P/CIR/2025/74 dated 23rd May, 2025, directing all its intermediaries to comply with the said Supreme Court Order. Now, on 14th August, 2025, the Reserve Bank of India has issued a notification no. RBI/2025-26/74 , wherein it has directed that all regulated entities shall mandatorily undertake appropriate measures in this regard.  Background:  Two writ petitions...