Aadhaar may soon stand for KYC norms, says Nilekani

Aadhaar may soon stand for KYC norms, says Nilekani

"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.