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Saturday, September 28, 2013

Aadhaar, fingerprint scan enough to open bank account

MUMBAI: A few weeks after RBI governor Raghuram Rajanstressed on building credit histories of individuals based on theAadhaar number, one bank has introduced unique identity-based eKYC for opening loan and savings accounts.

Axis Bank, which is using payment company Visa's network to access Aadhaar database , will introduce the eKYC facility in around 25 branches next week. The branches will open loan and deposit accounts based on the Aadhaar number and fingerprints instead of proof of address and proof of identity.

RBI had notified eKYC as an 'officially valid document' under anti-money laundering laws on September 2. The facility would enable an Aadhaarregistered individual from anywhere in the country to walk up to a branch and open an account by merely providing his UID and scanning his fingerprints . Not only will the Aadhaar database provide documents relating to the proof of identity, address and photograph , it will also populate the bank's database with the applicant's contact details. "The information needed to be provided in the application form for a savings account will be minimal ," said Jairam Sridharan, president, Axis Bank. However, in the case of loan products the bank would call for additional information, he said.

"For the middle-class customers , eKYC is a convenience but for the lower end of society, this will provide access like never before," said Sridharan. For migrant workers in metros such as Mumbai, a key challenge in opening accounts is meeting the bank's KYC requirements in terms of proof of address and proof of identity . Although RBI norms allow individuals to open a 'small account' in a bank on production of a self-attested photograph and affixation of signature or thumb print, banks are reluctant to push this account as KYC documents have to be obtained at the end of one or at most two years.

Sridharan said that it was expected that the Unique Identification Authority of India would update its database as and when the individual moved houses. This would facilitate periodic checks as required by the central bank. He said that even if the account were to be opened using the eKYC procedure, contact details could be updated subsequently using accepted KYC documents.

Upon taking charge on September 4, the RBI governor had said, "On the retail side, I particularly want to emphasize the use of the unique ID, Aadhaar , in building individual credit histories. This will be the foundation of a revolution in retail credit."

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