2025 (5) TMI 48 - SC - Indian Laws

Seeking appropriate directions from authorities - problems faced with the existing guidelines -Inaccessibility of the digital KYC/e-KYC/video KYC processes for persons with disabilities particularly acid attack survivors with permanent facial or eye disfigurement and persons with blindness or low vision - requirement to conduct due diligence of its clients by the banking companies and the financial institutions is mandated under the provisions of the Prevention of Money Laundering Act 2002 (PMLA) and the Rules 2005 - 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 - Enable persons with disabilities to enjoy and exercise their rights equally with others - Article 21 of the Constitution HELD THAT - As pointed out persons with disabilities encounter unique barriers in accessing online services due to the lack of accessible websites applications and assistive technologies. Similarly individuals in remote or rural areas often face poor connectivity limited digital literacy and a scarcity of content in regional languages effectively denying them meaningful access to e-governance and welfare delivery systems. In such circumstances the 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 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 therefore 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. In order to make the process of digital KYC accessible to persons with disabilities especially facial / eye disfigurements due to acid attacks and visual impairments we issue the following directions (i) The respondent authorities/Ministries shall direct all REs whether government or private to follow accessibility standards as prescribed from time to time. The respondents shall appoint a nodal officer in every department responsible for digital accessibility compliance. (ii) All regulated entities must mandatorily undergo periodical accessibility audit by certified accessibility professionals and involve persons with blindness in user acceptance testing phase while designing any app or website or in case of any new feature being launched. (iii) Respondent No. 2/ RBI shall issue guidelines to all regulated entities to adopt and incorporate alternative modes for verifying the liveness or capturing a live photograph of the customers as mandated under Annex-I of the MD on KYC 2016 for the purpose of conducting Digital KYC / e-KYC beyond the traditional blinking of eyes to ensure inclusivity and user-convenience. (iv) Respondent No. 2 / RBI shall issue appropriate clarifications / guidelines / directions to all regulated entities that they have Customer Due Diligence (CDD) and on-boarding of new customers can be done using the video-based KYC process or the V-CIP procedure in accordance with the provisions of the MD on KYC 2016 wherein blinking of the eyes is not a mandatory requirement. (v) The respondent authorities must design their KYC templates or customer acquisition forms to capture disability type and percentage of the customer and appropriately record as part of the account records so as to provide them accessible services or reasonable accommodations. (vi) The respondent authorities should provide clear directions to all regulated entities to accept image of thumb impression during Digital KYC process. (vii) Respondent No. 2 / RBI shall amend the MD on KYC so as to enhance the implementation of the OTP based e-KYC authentication (face-to-face) to customers. (viii) Respondent No.3 shall make the necessary amendments and/or modifications to its notification dated 05.12.2023 thereby ensuring that the paper-based KYC process for verification of customers shall continue enabling the petitioners and other similarly placed individuals to avail an accessible alternative for completing the KYC procedure. (ix) The respondent authorities shall provide options for sign language interpretation closed captions and audio descriptions for visually and hearingimpaired users. (x) The respondent authorities shall develop alternative formats including Braille easy-to-read formats voice-enabled services to disseminate government notifications and deliver public services ensuring accessibility for all. (xi) All regulated entities should procure or design devices or websites / applications / software in compliance of accessibility standards for ICT Products and Services as notified by Bureau of Indian Standards. (xii) The respondent authorities shall ensure that online services including e-governance platforms digital payment systems and e-launching platforms are accessible to persons with disabilities thereby fostering a barrier-free digital environment. (xiii) The respondent authorities are directed to ensure that all websites mobile applications and digital platforms comply with the Web Content Accessibility Guidelines (WCAG) 2.1 and other relevant national standards such as the Guidelines for Indian Government Websites (GIGW). It shall be mandatory for all Government websites to adhere to Section 46 of the RPwD Act 2016 which requires both electronic and print media to be accessible to persons with disabilities. (xiv) The respondent authorities shall issue appropriate guidelines to develop and implement a mechanism where customers who have already completed their KYC process with one regulated entity may authorize the sharing of their KYC information with other entities through the Central KYC Registry (CKYCR). (xv) The respondent authorities shall establish a dedicated grievance redressal mechanism for persons with disabilities to report accessibility issues. (xvi) The respondent authorities shall establish a mechanism for human review of rejected KYC applications in cases where accessibility-related challenges prevent successful verification. A designated human officer shall be empowered to override automated rejections and approve applications on a case-by-case basis. (xvii) The respondent authorities shall establish dedicated helplines for persons with disabilities offering step-by-step assistance in completing the KYC process through voice or video support. (xviii) Respondent No. 2 / RBI shall routinely initiate public campaigns through press release/ advertisement in electronic/ print and social media portals and to raise awareness increase sensitization and ensure effective dissemination of information about alternative methods of conducting Digital KYC / e-KYC and circulate standardized materials and mandate all regulated entities to display notices containing such information. (xix) The respondent authorities should mandate inclusion of disability awareness and training modules as part of e-learning modules for officials of regulated entities for better sensitization of officials. (xx) Respondent No. 2 / RBI shall monitor and ensure strict adherence by all regulated entities to the guidelines / notifications / directions issued by it including those in terms of directions issued by this Court in the instant Writ Petition. Thus both the writ petitions stand disposed of. No costs.

Summary

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered by the Court are:

(a) Whether the existing digital KYC/e-KYC/video KYC processes, as mandated by regulatory authorities, are accessible and inclusive for persons with disabilities, particularly acid attack survivors with permanent facial or eye disfigurement and persons with blindness or low vision;

(b) Whether the regulatory framework, including the Prevention of Money Laundering Act, 2002 (PMLA), the Rights of Persons with Disabilities Act, 2016 (RPwD Act), and related rules and guidelines, adequately provide for reasonable accommodations and accessibility in digital KYC processes;

(c) Whether the requirement of "live photograph" and "liveness" checks in digital KYC processes, including blinking of eyes or similar biometric validations, unlawfully exclude persons with disabilities who cannot comply with such criteria;

(d) Whether the regulatory authorities such as the Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), Telecom Regulatory Authority of India (TRAI), Department of Telecommunications (DoT), Pension Fund Regulatory and Development Authority (PFRDA), and Insurance Regulatory and Development Authority of India (IRDAI) have fulfilled their statutory obligations to ensure accessibility and reasonable accommodations in digital KYC processes;

(e) Whether the constitutional provisions, statutory laws, and international conventions obligate the State and regulated entities to ensure digital inclusion and accessibility for persons with disabilities in KYC and related financial and telecommunication services;

(f) What directions should be issued to ensure that digital KYC processes are inclusive, accessible, and compliant with the RPwD Act, 2016, and relevant accessibility standards.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (a): Accessibility and Inclusivity of Digital KYC Processes for Persons with Disabilities

Relevant Legal Framework and Precedents: The RPwD Act, 2016 and the RPwD Rules, 2017 mandate reasonable accommodation and accessibility for persons with disabilities. Article 21 of the Constitution guarantees the right to life with dignity, which has been interpreted to include accessibility. The UN Convention on the Rights of Persons with Disabilities (UNCRPD), ratified by India, requires States to ensure accessibility to information and communication technologies. Prior judgments have emphasized the State's duty to ensure accessibility and inclusion for persons with disabilities.

Court's Interpretation and Reasoning: The Court recognized that digital KYC processes, as currently designed, pose significant barriers to persons with disabilities, especially those with facial disfigurements or blindness. The requirement of live photographs and liveness checks such as blinking or facial movements exclude these individuals from independently completing KYC formalities, thereby denying access to essential financial and telecommunication services. The Court emphasized that true inclusion requires digital infrastructure to accommodate diverse needs.

Key Evidence and Findings: Petitioners demonstrated their inability to comply with live photograph requirements due to facial or eye disfigurements and blindness. The digital KYC platforms lack accessibility features such as screen reader compatibility, audio guidance, or alternative verification methods. Officials and third-party agents lack adequate training to assist persons with disabilities. The biometric devices and digital interfaces do not comply with accessibility standards prescribed under the RPwD Act and Bureau of Indian Standards (BIS).

Application of Law to Facts: The Court found that the current digital KYC processes violate the statutory mandate for reasonable accommodation and accessibility under the RPwD Act and the fundamental right to life with dignity under Article 21. The exclusion of persons with disabilities from essential services due to inaccessible KYC processes constitutes discrimination.

Treatment of Competing Arguments: Respondent authorities acknowledged the challenges but contended that blinking or eye movement is not the sole method for liveness checks and that alternative methods exist. They submitted that physical or offline KYC options are available in exceptional cases. However, the Court noted that these alternatives are inconsistently applied and insufficient to guarantee equal access.

Conclusions: Digital KYC processes must be redesigned to incorporate accessibility features and alternative verification methods to ensure inclusion of persons with disabilities.

Issue (b): Adequacy of Regulatory Framework and Reasonable Accommodations

Relevant Legal Framework and Precedents: The PMLA, 2002 and the Prevention of Money Laundering (Maintenance of Records) Rules, 2005 mandate client due diligence and KYC verification. The RPwD Act, 2016 requires reasonable accommodations and accessibility standards. The RBI Master Direction on KYC, 2016 prescribes digital KYC procedures including live photograph capture and video-based customer identification process (V-CIP). The UNCRPD and national policies emphasize accessibility and inclusion.

Court's Interpretation and Reasoning: The Court examined the statutory and regulatory provisions and found that while the PMLA and RBI guidelines mandate KYC and digital KYC procedures, they do not explicitly incorporate accessibility requirements or reasonable accommodations for persons with disabilities. The RPwD Act imposes a binding obligation on the State and entities to ensure accessibility and reasonable accommodation, which must be integrated into KYC processes.

Key Evidence and Findings: Respondents submitted that the RBI guidelines permit alternate methods for liveness checks beyond blinking, including varied questioning and OTP verification. Some sectors allow offline/physical KYC and thumb impressions instead of signatures. However, these provisions are not uniformly implemented or clearly communicated. Accessibility standards under the RPwD Act and BIS are not consistently followed.

Application of Law to Facts: The Court held that the regulatory framework must be amended to explicitly mandate accessibility and reasonable accommodations in digital KYC processes. The absence of clear guidelines and uniform implementation results in exclusion and discrimination.

Treatment of Competing Arguments: Respondents argued that existing guidelines and exceptions suffice, and that they have taken steps to sensitize officials and improve accessibility. The Court found these measures inadequate and emphasized the need for enforceable standards and comprehensive reforms.

Conclusions: The Court directed regulatory authorities to revise and clarify their guidelines to ensure accessibility and reasonable accommodations are integral to digital KYC processes.

Issue (c): Legality and Impact of "Live Photograph" and "Liveness" Checks

Relevant Legal Framework and Precedents: The RBI KYC Master Directions require live photograph capture and liveness checks to prevent fraud and money laundering. However, the RPwD Act mandates reasonable accommodation. Prior judgments have recognized that procedural requirements must not result in discrimination.

Court's Interpretation and Reasoning: The Court analyzed the "live photograph" and "liveness" requirements and noted the absence of a clear, inclusive definition of "liveness." The common practice of requiring blinking or facial movements excludes persons with facial disfigurement or blindness. The Court recognized that liveness can be established through alternative means such as voice recognition, random questioning, OTP verification, or other biometric cues.

Key Evidence and Findings: Petitioners demonstrated their inability to comply with blinking or facial movement criteria. Respondents acknowledged that blinking is not mandatory and that varied questioning and OTP verification are used. However, the lack of standardized alternative criteria and failure to accept thumb impressions or alternative signatures were noted.

Application of Law to Facts: The Court held that the "live photograph" and "liveness" criteria must be expanded beyond blinking or facial movements to include alternative, accessible methods. Failure to do so violates the RPwD Act and constitutional rights.

Treatment of Competing Arguments: Respondents argued that the guidelines already allow alternatives and that physical KYC remains available. The Court found that these alternatives are neither adequately defined nor consistently implemented, and that physical KYC is being phased out, necessitating accessible digital alternatives.

Conclusions: The Court directed the RBI to amend the Master Directions to explicitly provide for alternative liveness criteria and accept accessible forms of signature, including thumb impressions.

Issue (d): Compliance by Regulatory Authorities with Accessibility Obligations

Relevant Legal Framework and Precedents: The RPwD Act, 2016, Section 40 and 46, mandates formulation and implementation of accessibility standards by the Central Government in consultation with the Chief Commissioner. The UNCRPD and national policies impose obligations on regulators to ensure accessibility.

Court's Interpretation and Reasoning: The Court reviewed submissions from RBI, SEBI, TRAI, DoT, PFRDA, and IRDAI. It found that while some measures have been introduced, such as special desks for persons with disabilities, alternative KYC modes, and accessibility guidelines for websites, these are partial and insufficient. TRAI disclaimed jurisdiction over KYC norms, placing responsibility on DoT. The Court emphasized that all regulatory authorities must coordinate and ensure compliance with accessibility standards.

Key Evidence and Findings: Respondents provided details of existing guidelines, training, and alternative processes. However, many accessibility standards, including those for biometric devices and digital platforms, remain unmet. The lack of comprehensive accessibility audits and grievance redressal mechanisms was noted.

Application of Law to Facts: The Court concluded that regulatory authorities have not fully discharged their statutory obligations to ensure accessibility and reasonable accommodation in digital KYC processes and related services.

Treatment of Competing Arguments: Respondents asserted ongoing efforts and readiness to comply with directions. The Court welcomed such commitments but found them insufficient without enforceable standards and monitoring.

Conclusions: The Court directed all regulatory authorities to adopt and enforce accessibility standards, conduct accessibility audits, sensitize officials, and establish grievance redressal mechanisms.

Issue (e): Constitutional and International Obligations to Ensure Digital Inclusion

Relevant Legal Framework and Precedents: Article 21 guarantees right to life with dignity; Articles 14 and 15 prohibit discrimination. The RPwD Act, 2016 is a super-statute embodying these principles. India is a signatory to the UNCRPD, which mandates accessibility and inclusion. National policies such as the National Policy on Universal Electronic Accessibility, 2013 and Guidelines for Indian Government Websites (GIGW) align with international standards like WCAG 2.0/2.1.

Court's Interpretation and Reasoning: The Court emphasized that digital access is an intrinsic component of the right to life and liberty under Article 21 in the contemporary era. The digital divide exacerbates exclusion and marginalization of persons with disabilities. The Court underscored the State's constitutional obligation to ensure inclusive digital infrastructure and services, consistent with international commitments.

Key Evidence and Findings: The Court cited prior judgments affirming accessibility as a fundamental right and the RPwD Act's status as a super-statute. It noted the absence of disability-specific anti-discrimination provisions in the Constitution but recognized the RPwD Act's quasi-constitutional status.

Application of Law to Facts: The Court found that exclusion from digital KYC processes violates fundamental rights and international obligations, necessitating proactive State intervention to bridge the digital divide.

Treatment of Competing Arguments: No adverse arguments were raised disputing the constitutional obligations; respondents acknowledged their duty.

Conclusions: The Court reaffirmed the constitutional and international mandate for digital inclusion and accessibility for persons with disabilities.

Issue (f): Appropriate Directions to Ensure Accessibility and Inclusion in Digital KYC

Court's Reasoning and Directives: The Court issued comprehensive directions to respondent authorities including:

• Mandating adherence to accessibility standards and appointing nodal officers for digital accessibility compliance;
• Requiring periodic accessibility audits by certified professionals and involvement of persons with disabilities in user acceptance testing;
• Directing RBI to issue guidelines expanding alternative methods for verifying "liveness" beyond blinking and amend KYC Master Directions accordingly;
• Maintaining paper-based KYC as an accessible alternative for persons with disabilities;
• Designing KYC forms to capture disability type and percentage to facilitate reasonable accommodations;
• Accepting thumb impressions as valid signatures in digital KYC;
• Providing sign language interpretation, closed captions, audio descriptions, and alternative formats such as Braille and easy-to-read materials;
• Ensuring compliance with WCAG 2.1 and Guidelines for Indian Government Websites;
• Establishing grievance redressal mechanisms and human review of rejected KYC applications due to accessibility challenges;
• Launching dedicated helplines and public awareness campaigns to sensitize officials and inform persons with disabilities;
• Monitoring strict adherence to these directions and accessibility standards.

The Court emphasized that these measures are necessary to uphold the fundamental rights of persons with disabilities and to ensure equitable access to essential services.

3. SIGNIFICANT HOLDINGS

"Accessibility refers to the design of products, services, environments, and systems to ensure that all individuals, including those with disabilities, can access, use, and benefit from them fully and independently. This encompasses physical access, such as entry to buildings and transport, as well as access to information, communication, and digital platforms. It is essential for promoting inclusion and enabling participation in all aspects of public life."

"The right to accessibility is not a new or separate human right, but rather an integral part of existing human rights frameworks. Accessibility is embedded within several international human rights treaties, reinforcing its foundational role in ensuring equality and dignity for all individuals, including those with disabilities."

"The RPwD Act, 2016 has acquired the status of a 'super statute' and hence, contains the ingredients of a quasi-constitutional law."

"Digital KYC processes that exclude persons with disabilities from independently completing verification formalities violate the fundamental rights under Article 21 of the Constitution and the statutory mandates under the RPwD Act, 2016."

"The requirement of 'live photograph' and 'liveness' checks must be expanded beyond blinking or facial movements to include alternative accessible methods such as voice recognition, random questioning, and OTP verification."

"Regulatory authorities must ensure that all digital platforms, applications, and services comply with accessibility standards such as WCAG 2.1 and the Guidelines for Indian Government Websites, and provide reasonable accommodations to persons with disabilities."

"The State's obligations under Article 21, read with Articles 14, 15, and 38, require proactive measures to bridge the digital divide and ensure that digital infrastructure and services are universally accessible and inclusive."

"The respondent authorities are directed to issue comprehensive guidelines, conduct accessibility audits, establish grievance redressal mechanisms, and sensitize officials to ensure that digital KYC processes are accessible and inclusive for persons with disabilities."