Banks invited for UID initiative

The Unique Identification Authority of India (UIDAI) has sought proposals from banks to submit requests for empanelment (RFE) for bank accounts using the Aadhaar number.

The finance ministry has recognised Aadhaar number issued by UIDAI as an “officially valid document” to satisfy the know your customer (KYC) norms for opening bank accounts.

“The bank which has been empanelled as part of this RFE process shall be responsible for the bank account opening of the resident within stipulated timelines as well as ensuring adherence to all the account servicing requirements,” UIDAI said in a statement.

Aadhaar is a 12-digit unique number which the UIDAI will issue for all residents of India. The number will be stored in a centralised database and linked to the basic demographics and biometric information – photograph, ten fingerprints and iris – of each individual. The details of the data fields and verification procedures are available here. So far more than 10 lakh Aadhar numbers have been issued.

UIDAI is facilitating opening of bank accounts for the residents at the time of enrolment for Aadhaar through partner banks and acceptance of Aadhaar as a valid KYC will make the process seamless.

“Banks shall have the option to offer any other products or services to the resident at its discretion but shall ensure adherence to RBI guidelines at all the times with respect to these accounts as in the normal course of its business,” UIDAI said.

The Aadhaar Enabled Account (AEBA) will be opened as a “no frills” account and regulated. The bank may convert it into a normal savings account at its discretion as per its banking policies.

The pre-bid conference for empanelment of banks will be held on Wednesday and bids will open on March 31.

“The Aadhar number is easily verifiable in an online, cost-effective way, unique and robust enough to eliminate the large number of duplicate and fake identities in government and private databases,” UIDAI said.

“It is a random number generated, devoid of any classification based on caste, creed, religion and geography,” it said.

“Aadhar number is expected to promote the financial inclusion of the poor and the hitherto excluded by making it possible for them to easily establish their identity and open bank accounts,” a finance ministry official said.