Cooperative banks get simplified Aadhaar framework to boost financial inclusion

New Delhi, Sep 19 (PTI) Cooperative banks will now be able to offer Aadhaar-enabled payment services under a revised framework unveiled by the Unique Identification Authority of India (UIDAI) that aims to expand digital financial services to rural and semi-urban areas.

Addressing a workshop on the new framework in New Delhi on Friday, Cooperation Ministry Secretary Ashish Kumar Bhutani said the initiative will empower cooperative banks to become more capable and self-reliant financial institutions.

"This will significantly expand the reach of financial inclusion to rural and semi-urban India, in line with the government's vision of inclusive growth through cooperation," Bhutani said, according to an official statement.

The new framework addresses long-standing challenges that kept cooperative banks outside the Aadhaar authentication ecosystem due to compliance and cost issues. UIDAI developed the simplified system in consultation with the Ministry of Cooperation, NABARD, NPCI, and cooperative banks.

Under the revised structure, only the 34 state cooperative banks (STCBs) will register with UIDAI as Authentication User Agencies (AUAs) and eKYC User Agencies (KUAs). The 351 district central cooperative banks (DCCBs) can then use the Aadhaar authentication infrastructure of their respective state banks, eliminating the need for separate IT systems.

"The revised framework is a robust and forward-looking mechanism which will greatly facilitate cooperative banks across the country in adopting Aadhaar-enabled authentication and eKYC services," UIDAI CEO Bhuvnesh Kumar said.

NABARD Chairman Shaji KV assured full support to cooperative banks for implementing the framework. The workshop saw participation from representatives of all STCBs and DCCBs, with over 500 participants joining virtually.

The streamlined approach is expected to make the process more cost-effective and efficient while giving a strong push to last-mile banking and digital inclusion efforts. PTI LUX TRB