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

Why Gorkhaland is an idea whose time has come

Darjeeling and the neighbouring areas are burning once again after the fire of the demand for Gorkhaland state was ignited by the West Bengal government’s provocative action in trying to impose Bengali language on the Gorkhali speaking majority in the hill districts in the north of the state. Three p

India stares down the dragon

India is increasingly turning to defence diplomacy to gain strategic depth in its neighbourhood and beyond, a move that is expected to checkmate China’s muscular domination. Defence as a tool of diplomacy is helping India to win over friendly countries who are currently witnessing a lot of

Recalling a time when BJP opposed GST

The Bharatiya Janata Party is today going to town over the Goods and Services Tax (GST). But, there was a time in the recent past when the party opposed it tooth and nail, with the Gujarat government, then led by Narendra Modi, describing it as “retrograde in nature and completely against the tenet

No water in a reservoir that supplies Chennai

 There is not even a drop of water in Cholavaram reservoir, says an officer from Chennai metropolitan water supply and sewerage board. The Cholavaram reservoir, one of the main water sources to Chennai, currently has zero million cubic feet (mcft) of water, according to data provided by Chen

Should Air India be sold off?

Should Air India be sold off?

Ransomware 2.0 hits India, Europe

Barely a month after the global Wannacry cyber hack, a new variant of ransomware malware has locked systems across several European countries and India. Petya, as cyber researchers call it, uses vulnerability in the Microsoft’s Windows system, and encrypts the computer files. It is understo





Video

Current Issue

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter