Government ups ante on linking Aadhaar to bank accounts

NEW DELHI: The government is accelerating the drive to demographically authenticate bank accounts with Aadhaar even as the Supreme Court prepares to hear a batch of petitions this month that challenge making Aadhaar mandatory for social welfare schemes.

The government wants to quickly reach the target of 1 billion Aadhaar-seeded accounts that are also demographically authenticated. Such accounts could be used to deliver benefits such as comprehensive social security. “This could also be the backbone in case a decision is taken on the universal basic income scheme,” said a government official aware of developments.

ET reported last week that the labour ministry was working on a universal social security scheme that would come free for the poorest fifth of the country at an estimated cost of Rs 1.2 lakh crore. Separately, Economic Survey 2016-17 discussed the idea of a universal basic income as a means of alleviating poverty.

In a recent study, the International Monetary Fund ( IMF) estimated that India could provide a universal basic income of Rs 2,600 a year to every person if it eliminates food and energy subsidies.

Around 750 million bank accounts have already been linked to Aadhaar. “The next phase was to demographically authenticate that the account holder and the Aadhaar number are of the same person and that has already been done for 48 crore accounts,” said the official cited above.

Demographic authentication entails matching the account holder’s personal information — name, date of birth, gender and address, et al — with Aadhaar number and associated biometric data.

Another government official said an exercise has been simultaneously launched to identify unique accounts, that is, those that are not part of multiple accounts held by the same person. So far, 450 such unique accounts have been identified. “This can help us find out details on beneficiaries and to stop any leakages,” he said.

The government made it mandatory to link bank accounts with Aadhaar earlier this year, warning that delinked ones will cease to be operational. A Reserve Bank of India statement last week said, “The Reserve Bank clarifies that, in applicable cases, linkage of Aadhaar number to bank account is mandatory under the Prevention of Money Laundering (Maintenance of Records) Second Amendment Rules, 2017 published in the Official Gazette on June 1, 2017.”

Three social security programmes were launched in 2014 — the Pradhan Mantri Suraksha Bima Yojana (PMSBY), the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and the Atal Pension Yojana (APY) — to bring the excluded within the ambit of formal financial services. The drive is billed as the ‘Jandhan to Jansuraksha’ initiative.