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| UID to be catalyst for financial inclusion |
| BS Reporter / Chennai/ Hyderabad Oct 23, 2009, 00:59 IST |
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Provision of a unique identity (UID) for person comprising his or her demographic and biometric details will become a power catalyst for achieving financial inclusion in the country, according to Nandan Nilekani, chairman of Unique Identification Authority of India (UIDAI).
Nilekani said the UID would provide online authentication services and anyone could go to any authentication centre in the country, which would authenticate the person's identity. This online authentication could be done even through a cell phone.
He said if the banks had business correspondents (BCs) in villages equipped with a mobile phone, a finger print reader and an ATM-kind of software, cash transactions could be done at the village itself. For instance, an NREG worker could go to any BC and withdraw money because UID would be an open architecture.
“Getting the payment infrastructure right is the first step for getting financial inclusion of the poor,” Nilekani said while delivering the foundation day lecture at the Institute for Development and Research in Banking Technology (IDRBT) here on Wednesday.
He said BCs could have micro ATMs whose cost was inexpensive at about Rs 5,000 each. Any kirana shop owner could be appointed as a BC and there was no need to open branches in interior areas. Thus, the transaction costs would come down but the volume of transactions was likely to go up by 50 times.
UID will have eight regional offices in as many states in the country, while its headquarters would be in Delhi. Its technology office would be in Bangalore and the operation of the basic data centre would be outsourced.
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