# Pragya Prasun & Ors v. Union of India & Ors

- **Citation:** 2025 INSC 599
- **Court:** Supreme Court of India
- **Decided:** 2025-04-30
- **Bench:** J.B Pardiwala, R. Mahadevan
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/pragya-prasun-ors-v-union-of-india-ors-38550
- **Pages:** 62

## Headnote

1.
Whether the present digital KYC / e-KYC / video-KYC
framework is inaccessible to persons with disabilities?
2.
Whether the regulatory authorities (RBI, SEBI, TRAI,
PFRDA, IRDAI, DoT) have failed to ensure reasonable
accommodations and accessibility in digital KYC processes?
3.
Whether the mandatory requirement of capturing a "live
photograph" and conducting a "liveness check" (through
blinking, reading text on screen, etc.) is discriminatory and
violative of Article 21 read in conjunction with Articles 14, 15
and 38 of the Constitution?
4.
Whether the absence of clear standards checks and
accessibility criteria in digital KYC guidelines violates the
Rights of Persons with Disabilities Act, 2016 and RPwD
Rules, 2017?
5.
Whether directions can be issued to the Respondents to
formulate appropriate rules and guidelines for conducting
Digital KYC/ e-KYC / Video KYC process through alternative
methods, to ensure that the process is more inclusive and
accessible to all persons with disabilities?
Headnotes†
Disability Rights - Accessibility of Digital Services - Digital
KYC - Facial Recognition - "Live Photograph" and "Liveness
Check" Requirements - Reasonable Accommodation - Equality
and Non-Discrimination - Regulatory Obligations of RBI,
SEBI, IRDAI, PFRDA, TRAI, DoT - Inter-operable Accessibility
* Author
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Standards - Know Your Customer (KYC) Norms - Framework
of - Explained:
Held: In an effort to combat illegal activities and money laundering,
the Central Government through the PMLA and the Rules, 2005,
mandated that all financial and banking institutions conduct client
identity verification, maintain comprehensive records, and report
relevant information to the Financial Intelligence Unit - India
- Pursuant to the same, the Reserve Bank of India issued the
Master Direction on Know your Customer (KYC), 2016 - The
Master Direction on KYC prescribes the framework for Customer
Due Diligence (CDD) procedures and outlines the digital KYC
process under Chapter VI and Annex I, respectively. Additionally,
Clause 18 of the MD on KYC introduced the Video based-Customer
Identification Process (V-CIP) enabling remote customer verification
through secure, real-time video interaction - As a result, multiple
sectors - Including banking, telecommunications, insurance,
and mutual funds - Have adopted digital KYC as a mandatory
component of their CDD or Customer Identification Program (CIP)
obligations, thereby facilitating identity verification of prospective
customers in compliance with regulatory requirements - According
to the petitioners, many Regulated Entities refuse to conduct offline
verification even when customers submit valid proof of possession
of Aadhaar - Additionally, the requirement of capturing a live
photograph under Option 2 creates a barrier for individuals with
facial/eye disfigurements and visual impairments, rendering them
unable to complete the digital KYC process. [Paras 12 and 13]
Legal framework - Constitutional and statutory provisions
placing obligation on Government to enable persons with
disabilities to exercise rights equally - Constitution of India -
UNCRPD, Arts.9 and 12 - Information Technology Act, 2000 -
Rights of Persons with Disabilities Act, 2016, Ss.2(c), 3, 12,
13, 16, 40, 42 and 46 - Purpose of - Explained:
Held: The Rights of Persons with Disabilities Act, 2016 marks a
paradigm shift from the earlier medical and technical model of
disability under the 1995 Act, which carried a significant burden
of stigma - The new model recognizes disability as a condition
arising not only from impairments but also from physical, mental,
intellectual, social, psycho-social, and other barriers that hinder
full and effective participation in society - These barriers lie at the
heart of the exclusion experienced by persons with disabilities,
preventing them from realizing their full potential and participating
[2025] 4 S.C.R.
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Pragya Prasun & Ors. v. Union of India & Ors.
a

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[2025] 4 S.C.R. 2851 : 2025 INSC 599
Pragya Prasun & Ors.
v.
Union of India & Ors.
(Writ Petition (Civil) No. 289 of 2024
With
Writ Petition (Civil) No. 49 of 2025)
30 April 2025
[J.B Pardiwala and R. Mahadevan,* JJ.]
Issue for Consideration
1.
Whether the present digital KYC / e-KYC / video-KYC
framework is inaccessible to persons with disabilities?
2.
Whether the regulatory authorities (RBI, SEBI, TRAI,
PFRDA, IRDAI, DoT) have failed to ensure reasonable
accommodations and accessibility in digital KYC processes?
3.
Whether the mandatory requirement of capturing a "live
photograph" and conducting a "liveness check" (through
blinking, reading text on screen, etc.) is discriminatory and
violative of Article 21 read in conjunction with Articles 14, 15
and 38 of the Constitution?
4.
Whether the absence of clear standards checks and
accessibility criteria in digital KYC guidelines violates the
Rights of Persons with Disabilities Act, 2016 and RPwD
Rules, 2017?
5.
Whether directions can be issued to the Respondents to
formulate appropriate rules and guidelines for conducting
Digital KYC/ e-KYC / Video KYC process through alternative
methods, to ensure that the process is more inclusive and
accessible to all persons with disabilities?
Headnotes†
Disability Rights - Accessibility of Digital Services - Digital
KYC - Facial Recognition - "Live Photograph" and "Liveness
Check" Requirements - Reasonable Accommodation - Equality
and Non-Discrimination - Regulatory Obligations of RBI,
SEBI, IRDAI, PFRDA, TRAI, DoT - Inter-operable Accessibility
* Author
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Standards - Know Your Customer (KYC) Norms - Framework
of - Explained:
Held: In an effort to combat illegal activities and money laundering,
the Central Government through the PMLA and the Rules, 2005,
mandated that all financial and banking institutions conduct client
identity verification, maintain comprehensive records, and report
relevant information to the Financial Intelligence Unit - India
- Pursuant to the same, the Reserve Bank of India issued the
Master Direction on Know your Customer (KYC), 2016 - The
Master Direction on KYC prescribes the framework for Customer
Due Diligence (CDD) procedures and outlines the digital KYC
process under Chapter VI and Annex I, respectively. Additionally,
Clause 18 of the MD on KYC introduced the Video based-Customer
Identification Process (V-CIP) enabling remote customer verification
through secure, real-time video interaction - As a result, multiple
sectors - Including banking, telecommunications, insurance,
and mutual funds - Have adopted digital KYC as a mandatory
component of their CDD or Customer Identification Program (CIP)
obligations, thereby facilitating identity verification of prospective
customers in compliance with regulatory requirements - According
to the petitioners, many Regulated Entities refuse to conduct offline
verification even when customers submit valid proof of possession
of Aadhaar - Additionally, the requirement of capturing a live
photograph under Option 2 creates a barrier for individuals with
facial/eye disfigurements and visual impairments, rendering them
unable to complete the digital KYC process. [Paras 12 and 13]
Legal framework - Constitutional and statutory provisions
placing obligation on Government to enable persons with
disabilities to exercise rights equally - Constitution of India -
UNCRPD, Arts.9 and 12 - Information Technology Act, 2000 -
Rights of Persons with Disabilities Act, 2016, Ss.2(c), 3, 12,
13, 16, 40, 42 and 46 - Purpose of - Explained:
Held: The Rights of Persons with Disabilities Act, 2016 marks a
paradigm shift from the earlier medical and technical model of
disability under the 1995 Act, which carried a significant burden
of stigma - The new model recognizes disability as a condition
arising not only from impairments but also from physical, mental,
intellectual, social, psycho-social, and other barriers that hinder
full and effective participation in society - These barriers lie at the
heart of the exclusion experienced by persons with disabilities,
preventing them from realizing their full potential and participating
[2025] 4 S.C.R.
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Pragya Prasun & Ors. v. Union of India & Ors.
as full and equal members and citizens - A vision enshrined by
the framers of our Constitution. [Para 14.4.2]
Access to information and communication technology -
Section 42 of the Rights of Persons with Disabilities Act,
2016 - Scope of - Explained:
Held: Section 13(1) mandates the 'appropriate government' to
ensure that the persons with disabilities have right, equally with
others, to own or inherit property, movable or immovable, control
their financial affairs and have access to bank loans, mortgages,
and other forms of financial credit - Section 42 of the Rights
of Persons with Disabilities Act, 2016, deals with 'Access to
information and communication technology' - This section requires
the appropriate Government to take measures to ensure that: (i)
all contents available in audio, print and electronic media are in
accessible format; (ii) persons with disabilities have access to
electronic media by providing audio description, sign language
interpretation and close captioning; (iii) electronic goods and
equipment which are meant for everyday use are available in
universal design - Section 46 provides 'time limit for accessibility
by service provides' - According to this provision, the service
providers whether Government or private shall provide services
in accordance with the rules on accessibility formulated by the
Central Government under section 40 within a period of two years
from the date of notification of such rules: Provided that the Central
Government in consultation with the Chief Commissioner may
grant extension of time for providing certain category of services
in accordance with the said rules. [Paras 14.4.6, 14.4.9, 14.4.10]
Non-Accessibility - KYC Verification - Persons with disability -
Rights of Persons with Disabilities Act, 2016 - Purpose
defeated:
Held: Though digital KYC has benefitted the general public by
making verification processes faster and more efficient, persons
with blindness and low vision continue to face significant barriers in
accessing and completing these procedures - Many digital platforms
are not compatible or accessible to persons with various disabilities,
and collectively amount to a denial of equal access and violate the
accessibility mandates under the Rights of Persons with Disabilities
Act, 2016 and results in economic and social marginalization - To
combat this discrimination, governments and private entities must
ensure that digital services comply with Web Content Accessibility
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Guidelines (WCAG) and other accessibility standards - Further,
legal frameworks should impose stringent requirements for digital
inclusion, ensuring that no individual is denied access to essential
services on the basis of disability - Thus, it is clear that as per
international standards and the Rights of Persons with Disabilities
Act, 2016, digital services are expected to be inclusive and
accessible to all users, regardless of ability. [Para 15]
International Law - Disabled Rights - Explained:
Held: India signed the United Nations Convention on the Rights
of Persons with Disabilities, 2006, on 30th March, 2007 and
ratified it on 1st October, 2007, and the Convention was enforced
in India from 3rd May 2008 onwards - It places the following three
important obligations on each State Party: (i) To respect the rights
and freedoms of persons with disabilities; (ii) To protect individuals
with disabilities from rights violations by others; (iii) To fulfil these
rights by taking appropriate legislative, administrative, and policy
measures - India adopted the Incheon Strategy in 2012 - It
offers the first set of regionally agreed inclusive development
goals aimed at making the rights of persons with disabilities a
reality in the Asia - Pacific region - Notably, ICT (Information and
Communication Technology) accessibility is specifically referenced
in Goal 3 of the strategy - This goal emphasizes the need to
enhance access to the physical environment, public transportation,
knowledge, information, and communication systems for persons
with disabilities. [Paras 14.2.1 and 14.3]
Interpretation - Right to Life - Article 21 - Bridging the Digital
Divide - Technological Realities - Considered:
Held: In the contemporary era, where access to essential services,
governance, education, healthcare, and economic opportunities
is increasingly mediated through digital platforms, the right to life
under Article 21 of the Constitution must be reinterpreted in light
of these technological realities - The digital divide-characterized
by unequal access to digital infrastructure, skills, and content -
Continues to perpetuate systemic exclusion, not only of persons
with disabilities, but also of large sections of rural populations,
senior citizens, economically weaker communities, and linguistic
minorities - The principle of substantive equality demands that digital
transformation be both inclusive and equitable - State's obligations
under Article 21- Read in conjunction with Articles 14,15 and 38 of
the Constitution - Must encompass the responsibility to ensure that
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digital infrastructure, government portals, online learning platforms,
and financial technologies are universally accessible, inclusive
and responsive to the needs of all vulnerable and marginalized
populations - Bridging the digital divide is no longer merely a matter
of policy discretion but has become a constitutional imperative to
secure a life of dignity, autonomy and equal participation in public
life - The right to digital access emerges as an intrinsic component
of the right to life and liberty, necessitating that the State proactively
design and implement inclusive digital ecosystems that serve not
only the privileged but also the marginalized, those who have been
historically excluded. [Para 17]
Directions Issued - Mandatory Incorporation of Accessibility
Standards - Periodical Accessibility Audit - Provision of
Alternative KYC Modes - Implementation of OTP Based
e-KYC authentication - Dedicated Grievance Redressal
Mechanisims - Monitoriting and enforcement:
Directions were issued to Respondent authorities/Ministries to make
the process of digital KYC accessible to persons with disabilities,
especially facial / eye disfigurements due to acid attacks and visual
impairments [Para 18]
Case Law Cited
Vikash Kumar v. Union Public Service Commission & Others [2021]
12 SCR 311 : (2021) 5 SCC 370; Rajive Raturi v. Union of India &
Others [2017] 12 SCR 827: (2018) 2 SCC 413; D Rajive Raturi v.
Union of India & Others, 2024 INSC 858 : [2024] 11 SCR 970;
Disabled Rights Group & Anr. v. Union of India & Others [2017]
12 SCR 988 : (2018) 2 SCC 397; Avishek Goenka v. Union of
India [2012] 5 SCR 547 : [Supreme Court decision in W.P.(C)
No.285 of 2010] - referred to.
Other References
United Nations Convention on the Rights of Persons with
Disabilities, 2006 and Incheon Strategy to "Make the Right Real"
for Persons with Disabilities in Asia and the Pacific - referred to.
List of Acts
Persons with Disabilities Act, 2016; Information Technology Act, 2000;
Reserve Bank of India Act, 1934; Prevention of Money Laundering
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Act, 2002; Aadhaar (Targeted Delivery of Financial and Other
subsidies, Benefits and Services) Act, 2016; Telecom Regulatory
Authority of India Act, 1997; Indian Telegraph Act, 1885; Pension
Fund Regulatory Authority and Development Authority Act, 2013.
List of Keywords
Digital KYC Process; Disabled Rights; Persons with Disability;
KYC Norms; Accessibility; Inclusivity; Dignity; Equal Participation;
Reasonable Accommodations; Disability Awareness.
Case Arising From
CIVIL ORIGINAL JURISDICTION: Writ Petition (Civil) No. 289 of
2024
Under Article 32 of The Constitution of India
With
Writ Petition (Civil) No. 49 of 2025
Appearances for Parties
Advs. for the Petitioners:
Siddharth Luthra, Sr. Adv., Nitin Saluja, Ms. Nimisha Menon,
Ms. Yamina Menon, Ms. Samarth Luthra, Ms. Ishita Soni,
Ms. Pranya Madan, Ms. Ila Shikhar Sheel.
Advs. for the Respondents:
Brijender Chahar, A.S.G., V Giri, Sr. Adv., Ramesh Babu M.R.,
Ms. Nisha Sharma, Ms. Manisha Singh, Ms. Jagrit Bharti, Rohan
Srivastava, Ankur Sood, Dhaman Trivedi, Sudarshan Lamba, Ms.
Swarupama Chaturvedi, Aaditya Dixit, Raman Yadav, Ms. Shashwat
Parihar, Arjun Krishnan.
Judgment / Order of the Supreme Court
Judgment
R. Mahadevan, J.
1.
Since the issues involved in both the writ petitions are common,
interlinked, and similar, they were heard together and are disposed
of by this common judgment.
[2025] 4 S.C.R.
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2.
Technology has played a transformative role in reshaping India's
economy and governance. Initiatives such as Digital India aim to
promote efficiency, transparency, and accessibility through digital
means. Central to this transformation has been the creation of a
robust digital infrastructure, including the Aadhaar program, online
KYC mechanisms, and various electronic service delivery platforms.
However, amidst this wave of digital progress, there remains a
crucial and often overlooked aspect that demands urgent attention -
ensuring that digital infrastructure and services are accessible to all,
including persons with disabilities and other marginalised groups. True
inclusion requires that technological advancements accommodate
the diverse needs of all citizens, thereby fostering an environment
where no individual is left behind. With this preface, we now proceed
to examine the key issues involved in the cases before us.
3.
While the petitioners in W.P(C) No.289 of 2024 are acid attack
victims, who suffer from facial disfigurement and severe eye burns,
the petitioner in W.P(C) No.49 of 2025 is suffering from 100%
blindness. These writ petitions have been filed seeking directions
to the various respondents to formulate appropriate rules and
guidelines for conducting Digital KYC/ e-KYC / Video KYC process
through alternative methods, with a view to ensuring that the process
is more inclusive and accessible to all persons with disabilitiesparticularly acid attack survivors suffering from permanent facial/eye
disfigurement and similarly placed individuals, including persons with
blindness and low vision - in accordance with the provisions of the
Rights of Persons with Disabilities Act, 20161, Rights of Persons with
Disabilities Rules, 20172, and Article 21 of the Constitution of India.
The writ petitions further seek to ensure that adequate measures
are undertaken to guarantee accessibility and provide reasonable
accommodations for persons with disabilities, in accessing financial
services, telecommunications, and government schemes.
3.1 For the sake of specificity, the prayers made in the respective
writ petitions are extracted below:
1
For short, "the RPwD Act, 2016"
2
For short, "the RPwD Rules, 2017"
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W.P(C) No. 289 of 2024
"(i) To direct the Central Government to frame fresh
guidelines for providing alternative methods or means
to conduct the Digital KYC / e-KYC process for
acid-attack survivors suffering from permanent eyedisfigurement or similarly placed individuals,
(ii) To direct all public and private establishments
conducting Digital KYC / e-KYC process to effectively
implement the aforesaid guidelines and frame
appropriate organizational policies to provide for
alternative methods or means that enable acid-attack
survivors suffering from permanent eye-disfigurement
or similarly placed individuals to conduct their Digital
KYC / e-KYC process,
(iii) To direct the Central Government to frame
appropriate provisions to clarify the meaning and
interpretation of "live photograph" as mentioned
under the Annexure I of the RBI - KYC Master
Directions, 2016 for conducting the Digital KYC
/ e-KYC process to expand its purview beyond
the blinking of eyes with other alternative criteria
such as movements of facial features and/or voice
recognition,
(iv) To direct the RBI to amend and / or frame suitable
alternatives for satisfying the requirement of "live
photograph" in the Digital KYC / e-KYC process
under Annexure I of the RBI - KYC Master Directions,
2016 to enable acid attack survivors suffering from
permanent eye-disfigurement and other similarly
placed individuals to conduct the KYC process
independently,
(v) To direct the Central Government, RBI, SEBI,
and TRAI to issue directions to all public and
private establishments regulated by them including
banks, financial institutions, service providers,
and intermediaries to establish account-based
relationships and /or provide other financial and
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telecommunication services by using alternative
methods for conducting the Digital KYC / e-KYC
process that do not mandate acid attack survivors
suffering from permanent eye-disfigurement and other
similarly placed individuals to satisfy the "liveness"
criterion by blinking their eyes for the purpose of
completing the Digital KYC /e-KYC process,
(vi) To direct RBI, SEBI, and TRAI to issue instructions
to all public and private organisations and institutions
regulated by them including banks, financial
institutions, service providers, and intermediaries
wherein KYC is conducted to adopt and/or follow
offline and/or physical KYC procedures for acid attack
survivors suffering from permanent eye-disfigurement
and other similarly placed individuals who cannot
blink their eyes for conducting the Digital KYC /e-KYC
process, and
(vii) To direct the Central Government, RBI, SEBI, and
TRAI to sensitise all public and private establishments
conducting the Digital KYC / e-KYC to actively
assist acid attack survivors with permanent eyedisfigurement and similarly placed individuals in
availing their banking, telecommunication and other
financial services."
W.P (C) No.49 of 2025
"(i) To direct the Central Government, Reserve Bank
of India, Securities and Exchange Board of India,
Pension Fund Regulatory and Development Authority,
Insurance Regulatory and Development Authority of
India, Department of Telecommunications, Telecom
Regulatory Authority of India, to frame rules for
making the process of digital KYC/e-KYC accessible
to persons with blindness / low vision,
(ii) To direct the respondents to ensure effective
compliance of accessibility standards by all public
and private establishments conducting digital KYC/
e-KYC/ Video-KYC,
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(iii) To direct the Central Government to frame
appropriate provisions to expand or clarify the
meaning and interpretation of "live photograph"
as mentioned under the Prevention of Money
Laundering (Maintenance of Records) Rules, 2005,
Annexure I of the RBI - KYC Master Directions, 2016
for conducting the digital KYC/ e-KYC/ video-KYC
process, circulars issued by other respondents to
expand its purview beyond the blinking of eyes and
reading out text displayed on the screen with other
alternative criteria,
(iv) To direct the Reserve Bank of India to amend
and/or frame suitable alternatives for rejection of the
account opening process on account of prompting at
the end of the customer to accommodate assistance
taken by persons with blindness / low vision during
the digital KYC/e-KYC/ video-KYC process,
(v) To direct the Reserve Bank of India to amend
and/or frame suitable alternatives for satisfying the
requirement of signature verification in the digital
KYC/e-KYC process to enable persons with blindness
/ low vision to use thumb impressions,
(vi) To direct the respondents to sensitize all public
and private establishments conducting digital KYC/
e-KYC/ video-KYC to actively assist persons with
blindness / low vision in availing the services, and
(vii) To direct the respondents to consider the
accessibility needs of persons with disabilities
especially with blindness while framing any policies
for public at large."
4.
According to the petitioners in WP(C) No. 289 of 2024, who are acid
attack survivors, they have experienced difficulties in completing
the digital KYC / e-KYC process due to their inability to click a "live
photograph" by blinking, which has prevented them from opening a
bank account and purchasing a SIM card from the telecom providers.
It is the grievance of the petitioner in WP (C) No. 49 of 2025, who is
suffering from 100% blindness, that due to his disability, he faces daily
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challenges in establishing account-based relationships, conducting
transactions, availing services and verifying his identity - whether as
a customer or as a citizen accessing government schemes. These
difficulties arise primarily because digital KYC / e-KYC / video KYC3
norms are not designed keeping in view the accessibility needs of
persons with disabilities. Thus, the digital KYC process that excludes
persons with disabilities is a violation of the fundamental rights
enshrined under Article 21 of the Constitution of India.
5.
Continuing further, the learned counsel for the petitioners submitted
that vide RBI Master Direction, 2016, the digital KYC process has
been made mandatory. Following this, all major sectors - including
banking institutions, telecommunication companies, etc., require
KYC as a mandatory part of their registration processes. Accordingly,
digital KYC has now become indispensable for accessing essential
services, such as opening a bank account, demat and trading
accounts, SIM cards, pension accounts, insurance policies; any type
of financial investment, such as mutual funds, etc., obtaining Director
Identification Number from Ministry of Corporate Affairs, buying a
FASTag device for National Electronic Toll Collection, obtaining a
digital signature under the Information Technology Act, 2000, for
income tax return filing or for government tendering, and for high
value immovable property transactions involving buying, selling or
renting. It is also required for accessing government benefits such
as national scholarships, annual life certificates for pensioners, direct
benefit transfers using Aadhaar, etc. However, these processes are
not fully accessible to persons with disabilities, particularly individuals
with facial disfigurements and visual impairments.
6.
Elaborating further, it is submitted by the learned counsel for the
petitioners that during the online KYC process, the following methods
are used to identify a customer:
(a) Clicking a selfie,
(b) Face recognition,
(c)
Signing using pen and paper; or putting a signature on screen
using a mouse,
3
Hereinafter shortly referred to as "digital KYC"
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(d) Printing and rescanning or clicking a photo of the filled in form,
(e) Verification of OTPs in 30 seconds, displaying documents or
KYC form / signature in original, and
(f)
Random question and response (e.g. flashing generic code/
text on screen for it to be read by the customer).
These methods are not accessible to persons with blindness, making
it impossible for them to complete the formalities independently without
physical assistance. For instance, the face recognition method does
not provide adequate guidance on how to correctly align one's face
with the camera. Consequently, individuals with visual impairments
or facial disfigurements are often unable to complete the process
independently and require assistance from a sighted person. A similar
challenge exists with the selfie-based verification method, where the
lack of accessibility features prevents autonomous completion of the
process. Therefore, the learned counsel submitted that to eliminate
the barriers / difficulties faced by persons with facial disfigurements
and visual impairments, in exercising their right to live with dignity and
integrity at par with others, it is the statutory duty of the government
to implement "reasonable accommodations", in accordance with the
provisions of the RPwD Act, 2016 read with the RPwD Rules, 2017.
7.
The learned counsel also placed reliance on a catena of decisions
viz., Vikash Kumar v. Union Public Service Commission & Others4,
Rajive Raturi v. Union of India & Others5, Disabled Rights Group &
Anr. v. Union of India & Others6, etc., wherein, this Court reiterated the
fundamental duty of the State and its instrumentalities to safeguard
the welfare, dignity and autonomy of persons with disabilities, in order
to ensure their complete integration into the mainstream of society.
Further, it emphasized the need for economic empowerment and
inclusion of persons with disabilities.
8.
Ultimately, the learned counsel for the petitioners submitted that
considering the difficulties and barriers faced on account of the
inaccessibility of the digital KYC process, this Court may pass
appropriate directions to the respondent authorities.
4
(2021) 5 SCC 370
5
(2018) 2 SCC 413
6
(2018) 2 SCC 397
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9.
Upon notice, learned counsel for the various respondents appeared
before us and submitted their responses, both orally and in writing.
For the sake of convenience, the same are summarised as under:
9.1 Respondent No.2 - Reserve Bank of India
9.1.1 It is submitted that the Central Government with an
intention to prevent money laundering and to combat
and prevent channelizing of money into illegal activities,
terror funding and other economic crimes, enacted
Prevention of Money Laundering Act, 20027. The PMLA
and its Rules, more specifically Prevention of Money
Laundering (Maintenance of Records) Rules, 20058
notified thereunder by the Central Government, make
it mandatory for the Banking Companies and Financial
Institutions, who are Reporting Entities to verify identity
of their clients, maintain records and furnish information
in the prescribed format to the Financial Intelligence
Unit India.
9.1.2 It is further submitted that under Section 11A(1) of the
PMLA, the Banking Companies and Financial Institutions
are under obligation to verify the identity of its clients, by-
(a) authentication under the Aadhaar (Targeted
Delivery of Financial and Other Subsidies,
Benefits and Services) Act, 2016 if the reporting
entity is a banking company; or
(b) offline verification under the Aadhaar
(Targeted Delivery of Financial and Other
Subsidies, Benefits and Services) Act, 2016; or
(c) use of passport issued under section 4 of
the Passports Act, 1967; or
(d) use of any other officially valid document
or modes of identification as may be notified
by the Central Government in this behalf:
7
For short, "the PMLA"
8
For short, "the Rules, 2005"
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9.1.3 It is further submitted that under Rule 9 of the Rules,
2005, every Banking Company is required to conduct
Client Due Diligence at the time of commencement of an
account-based relationship and identify its clients, verify
their identity, and obtain information on the purpose and
intended nature of the business relationship. In terms of
Rule 2(b) of the Rules, 2005, the Client Due Diligence
means 'due diligence carried out on a client'. Further,
where client is an individual, then he is mandated under
Rule 9(4) to submit the following -
(a) the Aadhaar number where-
(i)
he is desirous of receiving any benefit or
subsidy under any scheme notified under
Section 7 of the Aadhaar (Targeted Delivery
of Financial and Other subsidies, Benefits and
Services) Act, 2016
(ii)
he decides to submit his Aadhaar number
voluntarily to a banking company or any
reporting entity notified under first proviso to
sub-Section (1) of Section 11A of the Act; or
(aa) The proof of possession of Aadhaar
number where offline verification can be
carried out; or
(ab) The proof of possession of Aadhaar
number where offline verification cannot
be carried out or any officially valid
document or the equivalent e-document
thereof containing the details of his
identity and address; and
(b) The Permanent Account Number or the equivalent
e-document thereof or Form No. 60 as defined in
Income-Tax Rules, 1962; and
(c)
Such other documents including in respect of the
nature of business and financial status of the client,
or the equivalent e-documents thereof as may be
required by Reporting Entity.
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Pragya Prasun & Ors. v. Union of India & Ors.
9.1.4 It is further submitted that as per Rule 2(ab) of the Rules,
2005, "authentication" means the process as defined
under Section 2(c) of the Aadhaar (Targeted Delivery of
Financial and other subsidies, Benefits and Services) Act,
2016, which means the process by which the Aadhaar
number along with demographic information or biometric
information of an individual is submitted to the Central
Identities Data Repository (CIDR) for its verification with
respect to the correctness, or the lack thereof, on the
basis of information available with it.
9.1.5 It is further submitted that under Rule 2(bba) of the Rules,
2005, "digital KYC" means capturing the live photo of the
client and the officially valid documents or the proof of
possession of Aadhaar where offline verification cannot
be carried out along with the latitude and longitude of
the location where such live photo is being taken by an
authorized officer of the reporting entity.
9.1.6 It is further submitted that under Regulation 2(j) of the
Aadhaar (Authentication) Regulations, 2016, e-KYC
authentication means a type of authentication facility
in which the biometric information and/ or OTP along
with the Aadhaar number securely submitted with
the consent of the Aadhaar number holder through a
requesting entity, is matched against the data available
in the CIDR, and the authority returns a digitally
signed response containing the e-KYC data along with
other technical details related to the authentication
transaction.
9.1.7 Furthermore, in Annexure 1 to the Rules, 2005, the Central
Government has prescribed the process of Digital KYC,
as per which, the following is mandated:
(a) The Reporting Entities shall develop an application
for digital KYC process which shall be made
available at customer touch points for undertaking
KYC of their customers and the KYC process shall
be undertaken only through this authenticated
application of the Reporting Entities.
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(b) The access of the Application shall be controlled by
the RE and it should be ensured that the same is not
used by unauthorized persons. The Application shall
be accessed only through login-id and password or
Live OTP or Time OTP controlled mechanism given
by REs to its authorized officials.
(c)
The customer, for the purpose of KYC, shall visit the
location of the authorized official of the Reporting
Entities or vice-versa. The original Officially Valid
Document (OVD) shall be in possession of the
customer.
(d) The Reporting Entities must ensure that the
Live photograph of the customer is taken by the
authorized officer and the same photograph is
embedded in the Customer Application Form (CAF).
Further, the system Application of the RE shall put
a water-mark in readable form having CAF number,
GPS coordinates, authorized official's name, unique
employee Code (assigned by REs) and Date
(DD:MM:YYYY) and time stamp (HH:MM:SS) on
the captured live photograph of the customer.
(e) The Application of the Reporting Entities shall
have the feature that only live photograph of the
customer is captured and no printed or videographed photograph of the customer is captured.
The background behind the customer while
capturing live photograph should be of white
colour and no other person shall come into the
frame while capturing the live photograph of the
customer.
(f)
Similarly, the live photograph of the original
OVD or proof of possession of Aadhaar where
offline verification cannot be carried out (placed
horizontally), shall be captured vertically from above
and water-marking in readable form as mentioned
above shall be done. No skew or tilt in the mobile
device shall be there while capturing the live
photograph of the original documents.
[2025] 4 S.C.R.
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Pragya Prasun & Ors. v. Union of India & Ors.
(g) The live photograph of the customer and his original
documents shall be captured in proper light so that
they are clearly readable and identifiable.
(h) Thereafter, all the entries in the CAF shall be filled
as per the documents and information furnished
by the customer. In those documents where Quick
Response (QR) code is available, such details can
be auto-populated by scanning the QR code instead
of manual filing the details. For example, in case
of physical Aadhaar/e-Aadhaar downloaded from
UIDAI where QR code is available, the details like
name, gender, date of birth and address can be
auto-populated by scanning the QR available on
Aadhaar/e-Aadhaar.
(i)
Once the above-mentioned process is completed,
a One Time Password (OTP) message containing
the text that 'Please verify the details filled in form
before sharing OTP' shall be sent to customer's
own mobile number. Upon successful validation of
the OTP, it will be treated as customer signature
on CAF. However, if the customer does not have
his/her own mobile number, then mobile number
of his/her family/relatives/known persons may be
used for this purpose and be clearly mentioned in
CAF. In any case, the mobile number of authorized
officer registered with the Reporting Entities shall
not be used for customer signature. The Reporting
Entities must check that the mobile number used in
customer signature shall not be the mobile number
of the authorized officer.
(j)
The authorized officer shall provide a declaration
about the capturing of the live photograph of
customer and the original document. For this
purpose, the authorized official shall be verified
with One Time Password (OTP) which will be sent
to his mobile number registered with the Reporting
Entities. Upon successful OTP validation, it shall
be treated as authorized officer's signature on the
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declaration. The live photograph of the authorized
official shall also be captured in this authorized
officer's declaration.
(k)
Subsequent to all these activities, the Application
shall give information about the completion of the
process and submission of activation request to
activation officer of the Reporting Entities, and also
generate the transaction-id/reference-id number of
the process. The authorized officer shall intimate the
details regarding transaction-id/reference-id number
to customer for future reference.
(l)
The authorized officer of the Reporting Entities shall
check and verify that:-
(i)
information available in the picture of document
is matching with the information entered by
authorized officer in CAF;
(ii)
live photograph of the customer matches with
the photo available in the document; and
(iii) all of the necessary details in CAF including
mandatory field are filled properly.
(m) On Successful verification, the CAF shall be digitally
signed by authorized officer of the RE who will take
a print of CAF, get signatures/thumb-impression
of customer at appropriate place, then scan and
upload the same in system. Original hard copy may
be returned to the customer.
9.1.8 Thus, the requirement to conduct due diligence of its
clients by the banking companies and the financial
institutions is mandated under the provisions of the PMLA
and the Rules, 2005, and that, the process of verifying
the documents submitted by the clients is also included
in various rules and regulations as well as Acts as stated
above. Hence, the Reserve Bank of India in compliance
with Rule 9(14) of the Rules 2005, has issued the Reserve
Bank of India (Know Your Customer KYC) Directions,
2016, thereby reproducing and reiterating the process
and procedure prescribed in the PMLA Rules, 2005.
[2025] 4 S.C.R.
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Pragya Prasun & Ors. v. Union of India & Ors.
9.1.9 In reply to the submissions made on the side of the
petitioners, it is submitted by the learned counsel for
the RBI as under:
(a) RBI is not an appropriate authority to carry
out amendments so as to include the specific
suggestions of the petitioners in the already
elaborated and described process of digital KYC
in the PML Rules. However, it is reiterated that the
digital KYC process outlined in Annex I of the MD
on KYC and the V-CIP outlined in the MD on KYC
does not mandate Regulating Entities to necessarily
undertake 'blinking eye' test and the bank official
can ask varied questions to establish the liveness
of the customer during the V-CIP.
(b) In terms of paragraph 16 of the MD on KYC, when a
customer submits the proof of possession of Aadhaar
number where offline verification can be carried
out, the Regulating Entities shall carry out offline
verification. Further, when a customer submits any
OVD or proof of possession of Aadhaar where offline
verification cannot be carried out, the Regulating
Entities shall carry out verification through Digital
KYC. However, for a period not beyond such date
as may be notified by the Government for a class
of Regulating Entities, instead of carrying out Digital
KYC, the Regulating Entities pertaining to such
class may obtain a certified copy of the proof of
possession of Aadhaar number or the OVD and a
recent photograph where an equivalent e-document
is not submitted. Thus, RBI has already issued
comprehensive guidelines prescribing different
modes to carry out customer due diligence in terms
of respective PML Rules.
(c)
As per the instructions regarding V-CIP outlined
under paragraph 18 of the MD on KYC, Regulated
Entities may undertake V-CIP to carry out CDD in
case of new customer on-boarding for individual
customers, proprietor in case of proprietorship
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firm, authorized signatories and Beneficial Owners
(BOs) in case of Legal Entity (LE) customers. In
terms of paragraph 18(b)(i) of MD on KYC, each
Regulated Entity shall formulate a clear workflow
and standard operating procedure for V-CIP and
ensure adherence to it. The V-CIP process shall be
operated only by officials of the Regulated Entities
specially trained for this purpose. The official should
be capable to carry out liveness check and detect
any other fraudulent manipulation or suspicious
conduct of the customer and act upon it. Further, as
per paragraph 18(b)(iii), the sequence and/or type
of questions, including those indicating the liveness
of the interaction, during video interactions shall be
varied in order to establish that the interactions are
real-time and not pre-recorded. Furthermore, as
per para 11, Customer Acceptance Policy should
not result in denial of banking/financial facility to
members of the general public, especially those,
who are financially or socially disadvantaged.
(d) According to RBI, the guidelines regarding V-CIP
are already in place. As per paragraph 4 of the
MD on KYC, the Regulated Entities are directed to
have a KYC policy duly approved by the Board of
Directors. Furthermore, the Regulated Entities are
also mandated under the MD on KYC to ensure that
they comply and follow the directions issued by RBI.
(e) Referring to Clause 3(ii) of the Aadhaar
(Authentication and Offline Verification) Regulation
2021, it is submitted that in terms of proviso (i) to
paragraph 16 of the MD on KYC, when a customer
submits Aadhaar number under paragraph 16(a),
the Regulated Entities shall carry out authentication
of the customer's Aadhaar number using e-KYC
authentication facility provided by the Unique
Identification Authority of India.