diff -Naur a/lib/lib.h b/lib/lib.h
--- a/lib/lib.h	2013-09-23 01:21:06.000000000 +0900
+++ b/lib/lib.h	2013-10-02 17:35:44.558248834 +0900
@@ -187,6 +187,11 @@
 void mode_to_string(mode_t mode, char *buf);
 
 // password helper functions
+#define MAX_SALT_LEN  20 //3 for id, 16 for key, 1 for '\0'
+#define SYS_FIRST_ID  100
+#define SYS_LAST_ID   999
+int get_salt(char *salt, char * algo);
+void is_valid_username(const char *name);
 int read_password(char * buff, int buflen, char* mesg);
 int update_password(char *filename, char* username, char* encrypted);
 
diff -Naur a/lib/password.c b/lib/password.c
--- a/lib/password.c	2013-09-23 01:21:06.000000000 +0900
+++ b/lib/password.c	2013-10-02 17:35:06.034248508 +0900
@@ -1,19 +1,87 @@
-/* pwdutils.c - password read/update helper functions.
+/* password.c - password read/update helper functions.
  *
  * Copyright 2012 Ashwini Kumar <ak.ashwini@gmail.com>
  */
 
 #include "toys.h"
+#include "xregcomp.h"
 #include <time.h>
 
+static unsigned int random_number_generator(int fd)
+{      
+  unsigned int randnum;
+
+  xreadall(fd, &randnum, sizeof(randnum));
+  return randnum;
+}      
+       
+static char inttoc(int i)
+{      
+  // salt value uses 64 chracters in "./0-9a-zA-Z"
+  const char character_set[]="./0123456789abcdefghijklmnopqrstuvwxyz"
+    "ABCDEFGHIJKLMNOPQRSTUVWXYZ";
+
+  i &= 0x3f; // masking for using 10 bits only
+  return character_set[i];
+}      
+       
+int get_salt(char *salt, char *algo)
+{      
+  int i, randfd, salt_length = 0, offset;
+
+  if (!strcmp(algo,"des")){
+    // 2 bytes salt value is used in des
+    salt_length = 2;
+    offset = 0;
+  } else {
+    *salt++ = '$';
+    if (!strcmp(algo,"md5")){
+      *salt++ = '1';
+      // 8 bytes salt value is used in md5
+      salt_length = 8;
+    } else if (!strcmp(algo,"sha256")){
+      *salt++ = '5';
+      // 16 bytes salt value is used in sha256
+      salt_length = 16;
+    } else if (!strcmp(algo,"sha512")){
+      *salt++ = '6';
+      // 16 bytes salt value is used in sha512
+      salt_length = 16;
+    } else return -1;
+
+    *salt++ = '$';
+    offset = 3;
+  }    
+
+  randfd = xopen("/dev/urandom", O_RDONLY);
+  for (i=0; i<salt_length; i++)
+    salt[i] = inttoc(random_number_generator(randfd));
+  salt[salt_length+1] = '\0';
+  xclose(randfd);
+
+  return offset;
+}
+
+static void handle(int signo)
+{
+  //Dummy.. so that read breaks on the signal, 
+  //instead of the applocation exit
+}
+
 int read_password(char * buff, int buflen, char* mesg)
 {
   int i = 0;
   struct termios termio, oldtermio;
+  struct sigaction sa, oldsa;
+
   tcgetattr(0, &oldtermio);
   tcflush(0, TCIFLUSH);
   termio = oldtermio;
 
+  memset(&sa, 0, sizeof(sa));
+  sa.sa_handler = handle;
+  sigaction(SIGINT, &sa, &oldsa);
+
   termio.c_iflag &= ~(IUCLC|IXON|IXOFF|IXANY);
   termio.c_lflag &= ~(ECHO|ECHOE|ECHOK|ECHONL|TOSTOP);
   tcsetattr(0, TCSANOW, &termio);
@@ -25,7 +93,10 @@
     int ret = read(0, &buff[i], 1);
     if ( ret < 0 ) {
       buff[0] = 0;
+      sigaction(SIGINT, &oldsa, NULL);
       tcsetattr(0, TCSANOW, &oldtermio);
+      xputc('\n');
+      fflush(stdout);
       return 1;
     } else if (ret == 0 || buff[i] == '\n' || buff[i] == '\r' || buflen == i+1)
     {
@@ -34,35 +105,45 @@
     }
     i++;
   }
-
+  sigaction(SIGINT, &oldsa, NULL);
   tcsetattr(0, TCSANOW, &oldtermio);
   puts("");
   fflush(stdout);
   return 0;
 }
 
-static char *get_nextcolon(const char *line, char delim)
+static char *get_nextcolon(char *line, int cnt)
 {
-  char *current_ptr = NULL;
-  if((current_ptr = strchr(line, ':')) == NULL) error_exit("Invalid Entry\n");
-  return current_ptr;
+  while (cnt--) {
+    if (!(line = strchr(line, ':'))) error_exit("Invalid Entry\n");
+    line++; //jump past the colon
+  }
+  return line;
 }
 
-int update_password(char *filename, char* username, char* encrypted)
+/*update_password is used by multiple utilities to update /etc/passwd,
+ * /etc/shadow, /etc/group and /etc/gshadow files, 
+ * which are used as user, group databeses
+ * entry can be 
+ * 1. encrypted password, when updating user password.
+ * 2. complete entry for user details, when creating new user
+ * 3. group members comma',' separated list, when adding user to group
+ * 4. complete entry for group details, when creating new group
+ */
+int update_password(char *filename, char* username, char* entry)
 {
-  char *filenamesfx = NULL, *namesfx = NULL;
-  char *shadow = NULL, *sfx = NULL;
+  char *filenamesfx = NULL, *namesfx = NULL, *shadow = NULL,
+       *sfx = NULL, *line = NULL;
   FILE *exfp, *newfp;
-  int ret = -1; //fail
+  int ret = -1, found = 0;
   struct flock lock;
-  char *line = NULL;
 
   shadow = strstr(filename, "shadow");
   filenamesfx = xmsprintf("%s+", filename);
   sfx = strchr(filenamesfx, '+');
 
   exfp = fopen(filename, "r+");
-  if(!exfp) {
+  if (!exfp) {
     perror_msg("Couldn't open file %s",filename);
     goto free_storage;
   }
@@ -70,7 +151,7 @@
   *sfx = '-';
   ret = unlink(filenamesfx);
   ret = link(filename, filenamesfx);
-  if(ret < 0) error_msg("can't create backup file");
+  if (ret < 0) error_msg("can't create backup file");
 
   *sfx = '+';
   lock.l_type = F_WRLCK;
@@ -79,12 +160,12 @@
   lock.l_len = 0;
 
   ret = fcntl(fileno(exfp), F_SETLK, &lock);
-  if(ret < 0) perror_msg("Couldn't lock file %s",filename);
+  if (ret < 0) perror_msg("Couldn't lock file %s",filename);
 
   lock.l_type = F_UNLCK; //unlocking at a later stage
 
   newfp = fopen(filenamesfx, "w+");
-  if(!newfp) {
+  if (!newfp) {
     error_msg("couldn't open file for writing");
     ret = -1;
     fclose(exfp);
@@ -93,29 +174,34 @@
 
   ret = 0;
   namesfx = xmsprintf("%s:",username);
-  while((line = get_line(fileno(exfp))) != NULL)
+  while ((line = get_line(fileno(exfp))) != NULL)
   {
-    if(strncmp(line, namesfx, strlen(namesfx)) != 0)
+    if (strncmp(line, namesfx, strlen(namesfx)))
       fprintf(newfp, "%s\n", line);
     else {
       char *current_ptr = NULL;
-      fprintf(newfp, "%s%s:",namesfx,encrypted);
-      current_ptr = get_nextcolon(line, ':'); //past username
-      current_ptr++; //past colon ':' after username
-      current_ptr = get_nextcolon(current_ptr, ':'); //past passwd
-      current_ptr++; //past colon ':' after passwd
-      if(shadow) {
-        fprintf(newfp, "%u:",(unsigned)(time(NULL))/(24*60*60));
-        current_ptr = get_nextcolon(current_ptr, ':');
-        current_ptr++; //past time stamp colon.
-        fprintf(newfp, "%s\n",current_ptr);
+
+      found = 1;
+      if (!strcmp(toys.which->name, "passwd")) {
+        fprintf(newfp, "%s%s:",namesfx, entry);
+        current_ptr = get_nextcolon(line, 2); //past passwd
+        if (shadow) {
+          fprintf(newfp, "%u:",(unsigned)(time(NULL))/(24*60*60));
+          current_ptr = get_nextcolon(current_ptr, 1);
+          fprintf(newfp, "%s\n",current_ptr);
+        } else fprintf(newfp, "%s\n",current_ptr);
+      } else if (!strcmp(toys.which->name, "groupadd") || 
+          !strcmp(toys.which->name, "addgroup")){
+        current_ptr = get_nextcolon(line, 3); //past gid/admin list
+        *current_ptr = '\0';
+        fprintf(newfp, "%s", line);
+        fprintf(newfp, "%s\n", entry);
       }
-      else fprintf(newfp, "%s\n",current_ptr);
     }
-
     free(line);
   }
   free(namesfx);
+  if (!found) fprintf(newfp, "%s\n", entry);
   fcntl(fileno(exfp), F_SETLK, &lock);
   fclose(exfp);
 
@@ -124,7 +210,7 @@
   fsync(fileno(newfp));
   fclose(newfp);
   rename(filenamesfx, filename);
-  if(errno) {
+  if (errno) {
     perror_msg("File Writing/Saving failed: ");
     unlink(filenamesfx);
     ret = -1;
@@ -134,3 +220,29 @@
   free(filenamesfx);
   return ret;
 }
+
+void is_valid_username(const char *name)                                                                                              
+{
+  regex_t rp;
+  regmatch_t rm[1]; 
+  int eval;
+  char *regex = "^[_.A-Za-z0-9][-_.A-Za-z0-9]*"; //User name REGEX
+
+  xregcomp(&rp, regex, REG_NEWLINE);
+
+  /* compare string against pattern --  remember that patterns 
+     are anchored to the beginning of the line */
+  eval = regexec(&rp, name, 1, rm, 0);
+  regfree(&rp);
+  if (!eval && !rm[0].rm_so) {
+    int len = strlen(name);
+    if ((rm[0].rm_eo == len) ||
+        (rm[0].rm_eo == len - 1 && name[len - 1] == '$')) {
+      if (len >= LOGIN_NAME_MAX) error_exit("name is too long");
+      else return;
+    }
+  }
+  error_exit("'%s', not valid %sname",name,
+      (((toys.which->name[3] == 'g') || 
+        (toys.which->name[0] == 'g'))? "group" : "user"));
+}