A bill to allow the voluntary use of Aadhaar as an identity proof to open bank accounts and procure mobile phone connections was introduced in the Lok Sabha on Monday amid opposition.

The bill will amend the Aadhaar Act 2016 and replace an ordinance issued in March. It also proposes stiff penalties for the violation of norms.

Critics said given limited alternatives, the Aadhaar was likely to become the defacto identifier at banks and mobile outlets, with serious implications for data privacy and security.

Opposing the bill, RSP MP N.K. Premchandaran said the was a “grave violation” of the Supreme Court’s judgment on Aadhaar. He claimed private entities can get hold of Aadhaar data and violate the right to privacy.

In his reply to Premchandran, IT minister Ravi Shankar Prasad said Aadhaar was a valid law, in national interest and did not violate privacy. “Aadhaar is in the national interest and it does not infringe privacy

“I want to convince that there is no compulsory compliance. SIM cards can be taken with or without Aadhaar,” Prasad told the Lok Sabha members.

He said so far more than 60 crore people have taken SIM cards through Aadhaar.

The bill proposes to allow the voluntary use of the Aadhaar number for authentication and for identity proof in the opening of bank accounts and in the procuring of mobile connections.

The bill proposes penalty of up to Rs 1 crore on entities that violate the provisions of the Aadhaar Act, with an additional fine of up to Rs 10 lakh per day in case of continuous non-compliance.

Similarly, the unauthorised use of identity information by a requesting entity or an offline verification-seeking entity would be punishable with imprisonment of up to three years.

Besides, there will be a fine that may extend to Rs 1 lakh for companies..

The punishment for unauthorised access to the Central Identities Data Repository as well as data tampering is proposed to be extended to 10 years each from the current three years.

Exit option at 18

The bill also seeks to give a child an option to exit from the biometric ID programme on attaining 18 years of age.

The bill paves the way for the use of alternative virtual identity number to conceal the actual Aadhaar number.

The bill also proposes the deletion of Section 57 of the Aadhaar Act, relating to the use of a biometric identifier by private entities.

No denial of service

The amendment will prevent the denial of services by any entity for refusing to, or being unable to, undergo authentication.

The proposed amendments provide for the establishment of Unique Identification Authority of India Fund and confers enhanced regulator-like power on the UIDAI.