Five banks, including SBI, ICICI Bank, Indian Overseas Bank, HDFC and Axis Bank have launched Saral Money bank account service, which brings banking for the unbanked and marginalised section of the society through a Visa payment gateway, using the UIDAI (Aadhaar) card as a proxy for the Know Your Customer (KYC) criterion. [Source]
Saral Money makes sure that everyone with an Aadhaar (Unique Identification Number issued by the Government) automatically has an instant account in a bank. The Aadhaar holder can also purchase a card for a nominal fee to operate the account. With Saral Money, the government and other institutions can send money to anyone using only an Aadhaar number, irrespective of whether they have a bank account or not.
The beneficiary can withdraw their money from any ATM, any micro ATM using biometric authentication provided by Aadhar, through a bank branch, or access their money through web and mobile phones. In addition, with Saral Money citizen will now also be able to make purchases at retail counters through point of sale terminals.
Largely, the move would facilitate instant account opening, simplified documentation along with accessibility and reach. Now citizen can open a Saral Money banking account by providing Aadhaar letter as the proof of identity and address at any of these five banks and the “business correspondent” outlets.
The unique identification project, one of the most ambitious technology projects by the Indian government was earlier recognized as a valid proof of address to operate accounts with brokerage firms, mutual funds, portfolio managers and capital market entities.
Prior to this Chandigarh administration recognized Aadhaar as a valid proof for various welfare schemes being run by departments, boards, corporations, public undertakings and agencies in July this year. Aadhaar cards can also be used to open bank accounts and avail gas connections.
The move would help government to equip bank accounts to marginalized citizens improve transparency in schemes like the central employment guarantee scheme and efficiency in driving the country’s electronic payment and financial inclusion policies. The service aims to target the 210 million 12 digit unique identification number holders and expand them to 600 million by 2015.