Ensure opening of Aadhaar-enabled accounts, RBI asks banks

The Reserve Bank on Wednesday directed banks to ensure opening of Aadhaar-enabled banks accounts for beneficiaries of the Mahatma Gandhi National Rural Employment Guarantee Scheme and other social security schemes, for facilitating electronic transfers.

"In view of the timelines attached to implementation of Electronic Benefit transfer (EBT) for routing MGNREGA wages and social security benefits including proposed cash transfers in respect of subsidies on kerosene, LPG and fertilisers, you are requested to ensure opening of Aadhaar Enabled Bank Accounts (AEBA) of all the beneficiaries," the Reserve bank said in a circular.

It said such an account based on the Aadhaar unique national identification number should also be opened for residents of villages with less than 2,000 population for promoting financial inclusion.

The Unique Identification Authority of India (UIDAI), headed by Nandan Nilekani, is entrusted with the task of generating the Aadhaar unique identity cards and so far it has enrolled 100 million citizens under the scheme and issued unique identity numbers to over 60 million people.

Under the first phase of the project, UIDAI is to enrol 200 million citizens by March 2012. The project aims to provide about 600 million unique identification numbers by 2014.

The scheme was launched in September 2010 and is intended to improve implementation of social sector schemes of the government. Aadhaar identity cards are accepted as valid documents under the Know Your Customer norms for opening bank accounts, securing mobile connections and cooking gas connections.

The Aadhaar cards will also be used to plug leakages in the government's poverty alleviation programme. The Task Force on Direct Subsidies, also headed by Nilekani, has been tasked to prepare a payment system for the scheme.