Transcript Unique ID

UID and Financial Inclusion
UID Authority of India
www.uidai.gov.in
Features of UID-based financial inclusion
• Secure way to
access bank
account with
UID auth
• UID KYR is
sufficient KYC
for no-frills
accounts
• Bank account
for every
resident
UID Auth
Bank
account
KYR =
KYC
Rs. 100
incentive
• Rs. 100
incentive for
BPL residents
(13th FC)
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Ram’s efforts to collect his NREGA dues
2:30pm
deadline
2 hour wait at the bank and
a frustrated bank clerk
The return journey
14 km bus
journey
6 km walk to
bus stop
Ram’s Thursday
ordeal
Moneylender
dues @ 5% pm
Ration from
village kirana
with remaining
money
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Ram’s trade-off for his wages
Rs 10 Transport
Rs 25 Interest cost
Rs 91 Opportunity
cost of wasted day
Rs 546
Rs 546
Rs Zero ‘Processing
fee’
Rs 126 Total cost
> 20% of income
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The cost to the poor of ‘last mile’
financial distance
Estimated
spend ( Rs
crores)*
Central Schemes
NREGA
Sarva Shiksha Abhiyaan (SSA)
@ 10% cost,
JSY + ASHA
Indira Awaas Yojana
37,779
11,934
1,400
> 6,000crs
National Old Age + widow + disability pensions
8,795
4,000
Total across above schemes
63,908
Food, Fertilizer and Fuel subsidy
95,579
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Deposit cash at MicroATM
Deposit Rs.50
Ram
UID,
Fingerprint,
Amount
Ram hands
cash to BC
BC with a microATM
Ram credit,
BC debit
Beginning
Balance
Beginning
Cash
Ending
Balance
Ending
Cash
Ram
Rs.100
Rs.50
Rs.150
Rs.0
BC
Rs.1,000
Rs.1,000
Rs.950
Rs.1,050
Confirmation
receipt, SMS
Receipt
Withdraw cash at MicroATM
Withdraw Rs.50
Ram
UID,
Fingerprint,
Amount
Ram receives
cash from BC
BC with a microATM
Ram debit,
BC credit
Beginning
Balance
Beginning
Cash
Ending
Balance
Ending
Cash
Ram
Rs.100
Rs.0
Rs.50
Rs.50
BC
Rs.1,000
Rs.1,000
Rs.1,050
Rs.950
Confirmation
receipt, SMS
Receipt
NREGA wages: UID enabled direct transfer
Transfer money
From NREGA a/c
To UID 2653 8564 4663
Amount Rs546
Block
NREGA
Central switch
at NPCI
PIA bank a/c
Authentiction
GP NREGA
Debit NREGA a/c
Credit Ram’s a/c
Resident - Ram
UID 2563 8564 4663
Info
IVRS/ SMS
UID enabled
Resident no -frills bank a/c –
existing or new
Muster roll with
Ram’s UID
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Convenient cash withdrawal
Authentication
Resident - Ram
UID 2563 8564 4663
8. Info- IVRS/ SMS
6. Debit
4. Authenticate
and execute
Ram’s bank a/c
NPCI switch
1. Withdrawal request
9. Cash
7. Credit
3.NPCI request
TransferMoney
From UID 2653 8564 4663
To UID 7233 5968 3094
Amount 300
2. Money transfer instruction +
biometrics
BC’s bank a/c
BC (Kirana, SHG, PO etc))
With Micro-ATM
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UID: 7233 5968 3094
Common technology infrastructure across
customer service points
Bank branches
70,000 today
Innovations from the
lower end can migrate
to the higher end.
Example: cash transfers
85,000 by 2013
ATMs
45,000 today
100,000 by 2013
POS terminals
Innovations from the
higher end can migrate
to the lower end.
Example: railway tickets
500,000 today
1,000,000 by 2013
MicroATMs
1,500,000 by 2013
Mobile, internet, phone banking
Any where, any time access
Technology can be used to drive inclusion
Solutions lower in the pyramid are more inclusive
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Multiple smartcards
High cost, high complexity, low flexibilty
Backend
Assisted/Device
Resident
AADHAAR infra
NREGA
Pensions
Ram
NOAPS
IAY
RSBY
Confusing
array of
cards and
A/Cs
•Expensive and Duplicate H/W, S/W & Infrastructure for Govt.
•Duplicate records and lack of integrated MIS and monitoring
Online “virtual card” + mobile self service
Least cost, reduced complexity, high flexibility
Backend
Assisted/Device
Resident
AADHAR linked backend and
authentication system
Ram
PDS
NREGA
RSBY
Common
Online AADHAR
application
infrastructure Authentication & application
•Unified Identity verification via
AADHAR
•Unified backend via AADHAR
•Applications Residing entirely at the
backend/on the cloud
•Unified Access via
connected terminal and/or
mobile
•Device only authenticates,
therefore much cheaper,
simple
•No Smart Card
•AADHAR Linked Bank Account
•AADHAR Linked Mobile
Phone
Increased Access via Mobile Self Service
Enhanced flexibility and empowerment to residents
Reduced Cost and Complexity
Aadhaar enabled Offline vs Online solution
Issues
Offline
Online
Addresses duplicate
records

Information
Resides in “smartcard” Resides in “smart cloud”
Business application
Resides in the device
Resides online in the backend
cloud
Device
Complex, expensive
Simple, inexpensive
Interoperable
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Multi-modal
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Can work without
connectivity
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Real-time
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Financial Sector
• Banking
– Lower KYC costs
– Low transaction costs
– Increased reach, new revenue models
• Insurance
– Micro-insurance
– Fraud prevention for life insurance
• Securities
– Reliable and low cost KYC
– Micro-Gold ETFs
– Micro – Money Market Mutual Funds
www.uidai.gov.in
Thank You
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