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RBI panel sticks to 2016 deadline for Aadhar-linked bank a/c rollout

Saturday, 11 January 2014 - 8:20am IST | Place: Mumbai | Agency: DNA

Rs Nachiket Mor, chairman of the panel that has set a two-year target for opening of Aadhar-linked electronic bank account for every Indian, said that the deadline was practical.

Two bank chiefs—Shikha Sharma of Axis Bank and S S Mundra of Bank of Baroda—had expressed concern on banks’ being able to meet the deadline of January 1, 2016.

In a joint statement, they had suggested that the deadline be pushed by two more years.
“The bank account target is just an electronic target, a database entry. The big task of opening a bank account is verifying all the documents of the customer. This is being done by Aadhar. Why should banks repeat it,” Mor said.

He said the committee had consulted bankers and big lenders such as State Bank of India, Bank of Baroda and Axis Bank had agreed to participate.

The 13-member committee was set up by Reserve Bank of India (RBI) governor Raghuram Rajan to come up with ideas on comprehensive financial services for small businesses and low income households. The committee, that released the report on Tuesday, recommended that an electronic bank account be opened automatically with every Aadhar number for every adult in India.
This would help bring out financial inclusion at a faster pace. The RBI has to consider the
recommendations of the panel.

The deadline was set at January 1, 2016 assuming that Aadhar enrolment will be complete by December 2015. “The deadline is linked to that of UIDAI (Unique Identification Authority of India— the Aadhar issuing authority). If you think of it as an independent target, even four years is too short,” Mor said.

He said UIDAI was already undertaking the Know Your Customer process like a bank. “To make the bank go out and do it again is a Rs 200 crore cost,” said Mor.

The committee also consulted UIDAI chief Nandan Nilekani on the progress of enrolment. Mor said UIDAI is giving out 30 million numbers every month. “Opening an account is not an issue unless you believe that Aadhar enrolment will not complete by 2015. Then it would depend on what kind of extension would you require,” said Mor, adding UIDAI has assured that the process is on track. The UIDAI aims to deliver Aadhar numbers to over 600 million residents by 2014.

What’s the plan?

The 13-member panel was set up to come up with ideas on comprehensive financial services for small businesses and low income households.

It recommended that an electronic bank account be opened automatically with every Aadhar number for every adult in India.

It had consulted bankers and big lenders such as State Bank of India, Bank of Baroda and Axis Bank had agreed to participate.


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