`Aadhaar` may soon stand for KYC norms: Nilekani

Last Updated: Thursday, December 9, 2010 - 22:55

Mumbai: Unique Identification Authority
(UIDAI) chairman Nandan Nilekani on Thursday said he was expecting
the Finance Ministry`s nod soon for his proposal to make the
UID number equal to the KYC norms for opening no-frills
accounts.
"We are talking to the Finance Ministry to make the
unique `Aadhaar` number equal to the KYC (know-your-customer)
norms for the village accounts being opened under the
financial inclusion project. We are expecting the go-ahead
soon," he said.

Nilekani was delivering the 27th Sir Purshotamdas
Thakurdas memorial lecture on `The goal of financial inclusion
-- Have we reached a tipping point?`, organised by the Indian
Institute of Banking and Finance here this evening.

Pitching for an all-inclusive online Aadhaar number,
Nilekani said, "Unless the (12-digit) UID number is made
real-time and work like a micro-ATM, there is no point in
going ahead with the project.

"Making the UID number equal to that of the KYC norms
can overcome the biggest entry barrier in the financial
inclusion plan -- that of personal details. KYC norms are
acting as the biggest entry barrier for urban and rural poor."

He argued that the apparent lack of Internet
connectivity today should not make us adopt a short-term
approach and go for an offline project. With the deepening
mobile penetration and the oncoming of 3G we should be
overcoming these barriers sooner than later.
Pointing out that they have already successfully
implemented on a pilot basis the Aadhaar project at Sindhudurg
in Maharashtra, Nilekani said so far they have issued the UID
numbers to 2 lakh people.

Of these, a whopping 85 per cent have demanded that
they want a bank account along with their number.

The pilot project works as a micro-ATM card, which can
accept or dispense cash, wherein a villager can approach a
banking correspondent, who in turn would check his/her details
with the Aadhaar record, which will then verify the given
information and finally dispense the cash to the third party.

Stating that as far financial inclusion goes, "we have
reached a tipping point with the launch of the project",
Nilekani said if the Aadhaar can be made to stand for the KYC
norms for banks, then it can exceed the number of bank
accounts the country has so far opened since commercial
banking was introduced here 240 years ago.

PTI



First Published: Thursday, December 9, 2010 - 22:55

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