After almost two years of issuing the first one in Nandurbar, Maharashtra, the Aadhaar card is finally gaining acceptance as identity proof. The thrust has come from the country's apex bank, the Reserve Bank of India (RBI).
Banks will now accept the Aadhaar card, issued by the Unique Identification Authority of India (UIDAI), for opening bank accounts. Till now, banks were accepting Aadhaar cards only as proof of identity, not as proof of residence. As a result, one had to produce a number of other documents such as telephone bills and rental agreements to open an account. RBI has now said it will suffice for both purposes.
The Securities and Exchange Board of India, in an August circular, allowed the card to be used as proof of address for all market instruments as well. Till now, the UIDAI has issued 220 million of such cards.
But its utility, at present, is limited to know-your-customer (KYC) norms. So, you can open a bank account easily but for any other financial transaction, you will still have to go through the KYC rigmarole and produce multiple documents.
For instance, if you want a home loan, you will still have to produce other documents, such as utility bill or ration card as proof of residence. Even in the case of other financial products like insurance or mutual funds, while Aadhaar may be accepted as KYC proof, it is not sufficient for making transactions. And, many telecom companies do not accept it if you want to purchase a SIM.
"The problem is that not everyone has this card as of now. Once more Aadhaar cards are issued, insurance companies might also accept Aadhaar as proof for KYC," said Amit Bhandari, VP-health underwriting and products, ICICI Lombard General Insurance Company.
To strengthen it further, RBI in its October policy proposed, though at a pilot project level, double authentication of credit card transactions through Aadhaar. It means that, along with swiping the card, the biometric authentication – either through an Iris scan (scanning of eyes) or a fingerprint – will also be required both at ATMs and point-of-sale (PoS) terminals.
The pilot project will be started in Delhi from November 15. If this works, stolen credit cards will be useless as transactions will not be possible without a fingerprint or Iris scan.
With the Bombay High Court suggesting to the Maharashtra government to consider linking ration cards with these cards to ascertain bogus and duplicate ones in the state, things are beginning to move on the Aadhaar front. It's time you got one as well.