Five banks, including SBI, ICICI Bank and Axis Bank, launched Saral Money bank account product which allows customers to open an account using Aadhaar card as address as well as identity proof.
The RBI has recently directed banks to accept Aadhaar letter as the proof of both identity and address if the address provided by the account holder is the same as that on the Aadhaar card.
“Through a product like Aadhaar-enabled KYC (Know Your Customer), we are bringing down the cost of account and that makes a product lot more attractive. And it will definitely further the cause of financial inclusion,” Axis Bank Managing Director and CEO Shikha Sharma said during the launch of Saral Money’, which is jointly launched by Axis Bank, ICICI Bank, HDFC Bank, SBI and Indian Overseas Bank.
Customers would be able to open a Saral Money banking account by providing Aadhaar letter as the proof of identity and address at any of these banks and the BC (business correspondent) outlets.
“Both for address proof and identity, Aadhaar can be used. To me of course, all of us would change our process and will not require a separate address proof (for opening an account). We needed it because of the regulatory requirement,” Sharma said.
The Visa payment settlement-based Saral Money account would enable the customer to make purchases, send money or receive government disbursements at the existing ATMs, point of sale terminals and proposed micro ATMs.
The service targets currently enrolled 210 million Aadhaar holders. The UIDAI plans to bring 600 million people under Aadhaar fold by 2015.
The first phase of the Saral Money rollout will include Delhi and National Capital Region and others parts of the country would be covered by the end of next year.
“This initiative will not only help the financially undeserved to access formal banking processes, but will also serve as a forerunner for the inclusive applications which we hope to see emerge on the Aadhaar foundational platform,” UIDAI Chairman Nandan Nilekani said.
Visa Group Country Manager of India and South Asia Uttam Nayak said this payment solution specifically targets India’s financially excluded regions and will support cash transfer of subsidies, scholarships and other government disbursements.