The Indian government is trying to bring financial services to citizens who don’t qualify for bank accounts through Saral Money, a scheme to issue prepaid cards to residents who have signed up for Aadhaar, India’s biometrics-based unique identity programme.
Under Saral Money, every resident who has been issued an Aadhaar number will automatically be eligible for a prepaid card provided by one of five participating national banks in conjunction with global financial services company, Visa. 210 million Aadhaar numbers have been issued till date, and the government plans to bring this number to 600 million by 2015.
Identity authentication upon use of the Aadhaar-linked prepaid card will be done through biometric data collected and stored by the Unique Identification Authority of India (UIDAI), the government agency responsible for the implementation of Aadhaar.
The government can transfer disbursements such as social welfare benefits or scholarships to the prepaid accounts of recipients. Residents can then use their cards to withdraw cash, make purchases with merchants that accept Visa, pay bills, and even transfer money to the prepaid accounts of others.
The participating banks will be provided with micro-ATMs – mobile handheld devices with fingerprint readers connected to the UIDAI biometric database. Authorised ‘banking correspondents’ will take the micro-ATMs to villages and towns, scan the fingerprints of people wishing to withdraw money from their prepaid cards, and disburse cash. The banks will initially deploy 500 micro-ATMs in the country.
The programme aims to provide access to financial services to those residents of India who do not qualify for bank accounts due to problems such as lack of adequate identification or the need for complicated documents. Electronic payments and government transfers are expected to enhance transparency and efficiency, and reduce corruption in social programmes notorious for cash leakages.
The project will initially be implemented in the National Capital Region of India, and be extended to other states in India by the end of 2013.
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