Indian banks resist Aadhaar subsidy transfer system

April 15, 2013 - 

Several banks in India have come out against a platform created by the Unique Identity Authority of India (UIDAI) which would see Aadhaar numbers used to authenticate ID before every transaction regarding bank accounts receiving welfare benefits.

Reported in the Economic Times, the banks’ resistance to this platform is rooted in two main concerns: Banks want the UIDAI to bear liabilities related to false identifications, and the UIDAI wants banks to reconfigure their existing systems to its interoperable solution.

Under the new system, banks will have to pay to use the UIDAI platform and in the interim, many have begun to implement their own fingerprint verification systems. The National Payment Corporation of India will directly send Aadhaar subsidies to banks.

In terms of the liability around false identifications issue, K Unnikrishan, the deputy chief executive of Indian Banks’ Association told the Economic Times that a request made by the banks to rework the agreement with this in mind, has been with the UIDAI for two months.

As we reported last month, 15% of consumers have already provided their Aadhaar details to banks.

Reported previously in, Aadhaar enrolment has now reached 286.66 million, representing a significant jump, owed widely to the launch of the UIDAI’s direct transfer scheme launched early this year.

This increase is good news to stakeholders in the Aadhaar program, as in May 2012, enrollment stood at only 4.76 million, significantly less than January for example, in which enrolment stood at 24.79 million.

Based on the country’s 2012-2013 Economic Survey, the second phase of the Aadhaar project aims to enroll 400 million residents by 2014.

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About Adam Vrankulj

Adam Vrankulj is an editor for His background consists of online news writing, editing and content marketing. Adam has written for, BlogTO and was the editor and curator for the nextMEDIA and CIX Source publications. He has a degree in journalism and is passionate about science, technology and social innovation. Contact Adam, or follow him at @adamvrankulj