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A new development bank rising in the east… What is the priority – mergers or NPA reduction? The collaboration suite of cyber criminals Reaching the Unreached… Cut in repo rate – lower than expected New capitals of Migrant banks A development bank for BRICS Capital base of regional rural banks raised How okay are new banks? Ferrying digital banking to Lakshadweep Growing volume of stressed assets… Payment banks have arrived Insatiable appetite for credit Perhaps small is more beautiful than big! Targets continue to be ad hoc Greet Lakshmi the banking robot Needed a Banking Atlas Well-lived... Small finance payment banks... Mega merger is on Bottomlines shrink, bad loans rise... Indian customers are tech savvy Drop in SLR- sparing lendable resources LVB- A supermarket of financial services The paradox: clamour for the Goliath and David Cradle of banks to a smart city... Small is ‘more’ beautiful Small finance banks offer high interest rates Nothing much can happen…. Monetary policy continues to adopt dis-inflationary path Aadhaar, niraadhaar and banking Drastic decline in asset quality How ‘secure’ are the secured loans? Anytime banking to anywhere banking Governance in Reverse Gear? It’s a war on black money, support it. Banking on Risk Another route for achieving financial inclusion One down in private sector Fund healthcare clinics in villages... Why any time money? A bank for women, by women Good, bad and ugly Just 660 days! Target over-ambitious... Ernakulam excels... Cautious and considerate Holy or unholy? Smart banking in smart cities Banking overhauling or reorganisation? Growing gainfully Banking in Telangana Who is the real beneficiary? All that glitters is not gold... Rationalised Hesitancy in announcing year-end results Financial inclusion vs unclaimed deposits Lacklustre credit expansion Stage set for Indian ‘avatar’ of foreign banks New bank licences, at last... Why priority status? Merger mania haunts banks From lazy banking to easy banking Emerging crisis United India Insurance - Rs 110 crore losses have been claimed till now due to floods in Tamil Nadu Big bank merger, bigger expectations Two banks: their jubilees and performances Thirty more cities seek to become SMART Reaching out: is it slowing down? Managing NPAs... Bank deposits account for 46.3 per cent of household savings Grows Bigger Too big to fail and too small to sail
 
Aadhaar, niraadhaar and banking
Aadhaar is a 12 digit number issued to all citizens in India by the Unique Identification Authority of India. UIDAI claims 93 per cent of adult residents possesses this unique identity, aka Aadhaar.

Aadhaar has now swept the nation off its feet.  Paul Romer, chief economist of the World Bank, hails it “as the most sophisticated ID programme in the world and it could be good for the world if this became widely adopted."

Mandatory for bank accounts...

Recently the Government of India announced that linking of Aadhaar should be mandatory for all non-small bank accounts, failing which, access to the bank account will be disabled after 31 December 2017. On 27 March 2017, the Supreme Court affirmed that Aadhaar couldn’t be made mandatory for availing benefits under welfare schemes. Hence, as of today, the linking of Aadhaar number to open bank accounts is made not compulsory.

Giving a unique number to all citizens free of cost is a novel experiment. All the more so for a populous country like India with steep poverty rates. The PAN card could have done the same job. But while it is compulsory for the tax-payers, non-tax citizens are out of its purview. No single card, other than Aadhaar reaches the entire population. 

 

Easy to get...

Aadhaar is easy to get. In fact, the Income Tax Department demands more financial details for issuing PAN cards than what is collected for issuing Aadhaar! Though a few tax-payers do grumble while furnishing such elaborate information, it is the tax-evaders who are vociferous in opposing the linkage of Aadhaar number with bank accounts. Aadhaar will also make the decennial census easy.

 

Fake Aadhaar cards

A large number of people still do not have an Aadhaar number. The poorer among them may not have bank accounts also.  However, they are enumerated in the decennial census and the voter list.  The existence of fake Aadhaar cards cannot be ruled out. But the higher cause for worry is the unimaginable distortions in Aadhaar cards made by some crooks. In some cases, even a few foreigners possess Aadhaar cards!

In all of the data about the performance of banks, there are no details available regarding the total number of customers. What is available is the number of accounts- deposit accounts or borrowing accounts.  The multiplicity of bank accounts held by individuals like saving deposit accounts and fixed deposit accounts, housing loans or vehicle loan, is an Indian characteristic. Hence, the number of accounts does not represent the number of persons having bank accounts.

Aadhaar card can be used to generate the actual number of bank customers, linking it with PAN card. Based on the data of TDS on fixed deposit, the number of customers in a branch can be derived. Aadhaar can be used to identify the account holder if he has deposited in banks. One limitation of this process, however, is that it cannot reach the non-PAN card holders and the small depositors.

It’s an idea whose time has come. 

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