Soon, people in rural areas would just need to walk into a kirana store in their vicinity with their Aadhaar number to instantly get a debit card.
Launched in New Delhi initially under the name Saral Money, major private and public sector lenders are planning to enable banking correspondents (BCs) and kirana stores to issue instant debit cards as part of their initiative to utilise the Aadhaar database for financial inclusion.
The government would be able to send money to people with such cards, even if the person does not have a bank account.
This would be initiated in two ways; with the help of banking correspondents visiting households and also through point-of-sale (PoS) terminals installed at various kirana stores.
A Crisil report states that there are 83.3 crore rural people and just about 211 million savings accounts. And the number of people who have access to credit is just 36.1 million.
?Once this is through, one can just go to a nearby store to open an account. The banking industry is still discussing how to manage the operations with banking correspondents,? said Visa Group?s country manager for India & South Asia, Uttam Nayak.
In December2013, ICICI Bank, HDFC Bank, Axis Bank, Indian Overseas bank and State Bank of India had tied up with Visa for a pilot project in New Delhi.
According to Nayak, once the kirana store, or the banking correspondent, gets the customer?s UID number, the person can pull out data like proof of identity, address, email ids and phone numbers attached to that aadhaar number, making the transaction not only paperless but also instantaneous.
Though not initially a part of this initiative with Visa, public sector lender Canara Bank also plans to take it up as it already provides smart cards in rural areas.
?We are looking at Saral Money in rural areas soon and with more stress on banks in rural areas to install ATMs, this becomes even more plausible,? Canara Bank general manager (priority credit and financial Inclusion) SS Bhat said.
In September last year, RBI had notified that electronic know your customer (eKYC) as ?officially valid?.
Indian Overseas Bank chairman and managing director M Narenda said that the bank was issuing smart cards in rural areas and close to seven to eight lakh cards had been issued.
According to a report by a panel headed by RBI financial inclusion committee head Nachiket Mor, by January 1, 2016, the number and distribution of electronic payment access points would be such that every resident would be within 15 minutes? walking distance from such a point anywhere in the country.
?Right now, we are just onboarding customers in rural India, ? said Rajeev Arora, director (Technology) at Fino PayTech, a company providing banking correspondents.