This means that manufacturers and user agencies such as banks and telcos that were staring at June 1 deadline will get time till September 30 to ensure that the new encryption key is embedded in all devices used for Aadhaar authentication.
Nearly 15-16 lakh biometric devices are currently being used for Aadhaar authentication across the country.
"We have decided to grant additional time as some device manufacturers and user agencies asked for more time for rolling out the new standards onto existing authentication devices," UIDAI CEO Ajay Bhushan Pandey told PTI.
A penalty of Re 0.30 will be imposed on each transaction, if these agencies use non-conforming or 'unregistered' biometric devices after July 31.
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Only 'registered devices' that incorporate the new specifications will be allowed to perform Aadhaar authentication after September 30, 2017.
The additional time will ensure that the authentication process is not disrupted, Pandey said asserting that the security layers currently in place are enough to ensure that system is fortified against any breach.
The addition of another security layer to the hardware assumes significance as these devices are all set to take the centrestage in biometric-based digital payments.
"Nearly two crore authentications are taking place every day, and we wanted the encryption roll-out to be non- disruptive. So we decided to take a gradual and measured approach," he said.
At the same time, the financial disincentives being put in place with effect from August 1 will ensure that the user agencies nudge the device makers to comply with the new standards at the earliest.
UIDAI is the nodal body responsible for rolling out Aadhaar, the 12-digit unique identification number that identifies residents based on their biometrics.
While more than 115 crore Aadhaar have been generated in the country, the Aadhaar authentications have crossed 600 crore till date.