RBI puts Aadhaar-linked payment mechanism on back burner for now

The move may have been taken due to the uncertainty regarding the future of Aadhaar under a BJP-led regime

GN Bureau | May 22, 2014



After several rounds of negotiations between the RBI and the banks and technology providers on establishing Aadhaar-linked payments mechanism failed to yield results, the banking regulator has deferred the plan for the time being.

According to media reports, the apex bank has asked banks to examine the technical difficulties related to the proposed payment system and decide on the time frame for implementing it. Reportedly, the move comes in the wake of uncertainty looming large on the fate of Aadhaar under a BJP-led government.

The apex bank sent a written communication regarding the new move to the Indian banks’ association (IBA), a consortium of public, private and foreign banks, a banker was quoted as saying. While the plan has not been scrapped altogether, it has been deferred only temporarily, the banker further said.

The RBI had received several complaints from all quarters, including bankers, technology providers and payment experts regarding the feasibility of the plan which would allow customers to use fingerprints to withdraw money from ATMs and pay for purchases.

According to the proposal, once Aadhaar seeding with a bank account is complete, the accountholder can withdraw funds from ATMs, receive government benefits directly into his/her bank account and also make payments using fingerprints.

Bankers had argued that this would require biometric readers being installed on the entire network of ATMs and point-of-sale (PoS) terminals which would be very expensive for the banks. In addition, critics had argued that it was a risky proposition and would be used only by a limited customer base.

The new instructions issued by the RBI, the banker quoted above said, took so much time due to the importance given to Aadhaar by the previous UPA government. With the coming in of a new government, the future of Aadhaar seems quite uncertain, the banker has said.
 

Comments

 

Other News

“Privacy is the foundation of what makes life worth living”

Joseph A Cannataci is the UN’s first and current special rapporteur for the right to privacy appointed by the Human Rights Council (HRC) in July 2015. His appointment came with growing global concerns about threats to privacy in the digital age where governments and big corporations collect

Suicide is all set to be decriminalised

Those who attempt suicide will no longer face criminal charges under the Indian Penal Code (IPC), once the Lok Sabha passes the “The Mental Healthcare Bill”. The government has introduced “The Mental Healthcare Bill”,

Challenges with regulation of medical education: Niti Aayog

  There are challenges with the regulation of medical education for Indian Systems of Medicine and Homoeopathy, said a Niti Aayog report.   A Preliminary Report of the Committee on the Reform of the Indian Medicine Central Council Act 1970 and Homoeopathy Cen

In conversation with author Chitra Banerjee Divakaruni

Chitra Banerjee Divakaruni was born in Kolkata and has spent most of her life in Northern California. The two cultures are reflected in her writings. Two of her books, The Mistress of Spices and Sister of My Heart, have been made into a movie and TV serial, respectively. Palac

Five points about UK parliament resolution on Gilgit-Baltistan

  Here are five highlights of the resolution that was passed by the British parliament over Gilgit-Baltistan in Pakistan.   Read: Resolution in British parliament 

Would AAP do well in the Delhi civic elections?

Would AAP do well in the Delhi civic elections?

Video

गोमती रिवर फ्रंट पहुंचे योगी

Current Issue

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter