India Extending Inclusion Through Alternative Customer Identification

Last month the Delhi government launched Saral Money, a payment product that helps to fill in the financial inclusion gap for individuals who don’t have the required identification verification documents to open a bank account. With Saral Money, one can open a basic account with one of India’s most prominent banks using just an Aadhar number. Aadhar numbers, issued by the government on a volunteer opt-in basis, are unique 12-digit identification numbers linked to an individual’s demographic and biometric information. Governance Now has more on the story through their post Next Aadhaar in Financial Inclusion: Saral prepaid card, which is copied in part below.

Delhi government on Wednesday launched the ‘Saral Money Prepaid card’ to provide banking services to those people who are unable to open a bank account due to lack of supporting documents for their ‘know your customer’ (KYC) verification. Saral has been launched by five of India’s prominent banks namely Axis Bank, HDFC Bank, ICICI Bank, Indian Overseas Bank and State Bank of India in collaboration with the payment gateway provider, Visa and Aadhar.

To open a bank account with the above five banks and to get a Saral Money Prepaid card, a person will now just have to produce the Aadhar card to fulfill the KYC norms. The limit of such accounts will be Rs 50,000 and the customer will be able to do cashless transactions with the help of the Saral card at the many authorised places in the city.

Chief minister of Delhi Sheila Dikshit said on the occasion, “It is very important to do away with old archaic systems (for banking) and leap forward in the future. The picture of banking is going to change very soon in India.”

“Saral will provide banking to people who could never have dreamt of owning a bank account,” she added.

All you have to need, to open a bank account for Saral is your Aadhar card. You can walk up to an authorised banking correspondent, which by the way can also be your local grocery shop vendor, fill a form with your name and other details, give a photocopy of your Aadhar card (which will also work as photo authentication) and authenticate yourself on the biometric reader through any of your ten fingers.

Once you are authenticated through Biometric and Aadhar number, you will be verified as a genuine customer and your account will be opened in a day. Such verification through biometric and Aadhar [is] also called ‘e KYC.’

Nandan Nilekani, chairmain, UIDAI, said that the UID/Aadhar platform is an open sourced identity service platform which can be used by anyone who wants to embed identity verification within their product.

“This is what VISA did (to provide Saral card to the customers),” he said.

Nilekani said that providing easy banking services is only the first step in the larger vision of financial inclusion of Aadhar. The next step would be to provide financial services to the people such as insurance, loan and other such products to increase their participation in banking in India.

With a Saral prepaid card which you get with your instant bank account, you will be able to recharge your mobile phone, pay your bills, book railway tickets and withdraw cash from an ATM. You can even deposit and withdraw cash from any of the authorised banking correspondents or banking correspondent centres such as again, your local grocery shop. The payment gateways for each of these transactions would be provided by VISA. The limit of such transactions will be 50,000.

To read the rest of the post, visit the Governance Now website.

Image credit: Jagran Post

Have you read?

What is the World Searching for?

Prelude to the U.S. Election: Voter IDs and Financial Identity

India’s Branchless Banking: Hype, Hope, and Promise