Earlier this month, the Consultative Group to Assist the Poor (CGAP) hosted a fascinating event featuring Ashok Singh, the Deputy Director General at the Unique Identification Authority of India (UIDAI). The focus was on how these unique ID numbers, or Aadhaar numbers, which are issued after iris and fingerprint scans are employed to ensure each individual is unique to the system, can provide a means for financial inclusion for the poor. Remarkably, Singh, said, UIDAI is issuing Aadhaar numbers at the rate of 1 million a day, with a goal of 600 million over the next four years. Aadhaar numbers are sufficient to meet know-your-customer banking regulations.
84 percent of those registering for Aadhaar numbers said yes to no-frills bank account offered simultaneously at the time of enrollment. Pretty unbelievable that you can now get a bank account with your eyeballs and fingertips. 40 percent of Indians, Singh said, don’t have proof of ID, so you can also imagine what kinds of problems that causes in government-citizen relationships, not to mention accountability in public spending programs. For anyone interested in more information, there was a great speech by Shri Khan, the Deputy Governor at the Reserve Bank of India, in August, on the general topic of banking and e-payments in India. Find that speech here.