FM asks lenders to seed Aadhaar with bank accounts

Describes the DBT as a "game-changer"

Seeking to expedite implementation of the Direct Benefits Transfer (DBT) scheme, the finance ministry on Thursday asked banks to approach customers for filing of Aadhaar numbers to ensure seamless transfer of the cash benefit.

"Today, I have asked my office to issue an advisory to all the chairmen of the banks to say that banks must directly approach the beneficiary and get the Aadhaar number and seed it into the bank account," Finance Minister P Chidambaram said in an interview to DD News.

Describing the DBT as a "game-changer", he said: "80 per cent (seeding of Aadhaar with bank account) was doable, achievable and with the advisory going out today, the rollout could be quite rapid in the remaining districts."

Linking or seeding of Aadhaar number with the bank account of a beneficiary is necessary to ensure seamless transfer of cash benefit relating to various government schemes such as LPG subsidy, scholarships and pension.

"We are asking for 80 per cent seeding only because we think that in the remaining 20 per cent, 10 per cent may be duplicate or false accounts and 10 per cent for whatever reason may not wish to claim the subsidy through the Aadhaar platform," he added.

On transfer of LPG subsidy, Chidambaram said, "It is an easy subsidy to be transferred. There is only one pay master which is the government of India to oil companies."

LPG subsidy, he said, would be rolled out throughout the country by the end of the year.

Asked what kind of savings the government could achieve through the DBT scheme, the finance minister said: "Quite a bit.... There will be huge saving. I think this will bring greater efficiency, transparency, accountability besides of course giving me significant savings."

Citing an example, he said, "If, say, one crore LPG beneficiaries are not genuine beneficiaries we knock out one crore every month at least for nine cylinders at the subsidy rate of about Rs 500 a cylinder. I will save Rs 500 crore a month and for nine cylinders I will save Rs 4,500 crore."

The aim of DBT was to get the money in the bank account, he said, adding, the Aadhaar provided a platform, there was another platform in the usual banking channel.

"When Aadhaar is not there, it means the payment will not go through Aadhaar payment channel, but it will still go through NEFT as long as the bank is able to identify the account by the account number and authority who is making the payment knows the account number," he said. "So, today the payment is going through two channel. The goal is that all the payment should move to Aadhaar channel."

The DBT has been rolled out in 121 districts from July 1 across the country. The finance minister said the DBT will be extended even for the transfer of food and fertiliser subsidy.