The Reserve Bank of India (RBI) in its second quarter review of Monetary Policy 2012-13 today paved the way for using Aadhaar biometric authentication for making trasactions with the help of cards at ATMs and Point of Sale (POS) terminals more secure.
Outlining a roadmap to achieve this objective, RBI said in the policy: “One of the recommendations of the Working Group formed for securing card present transactions (Chairperson: Ms. Gowri Mukherjee) was that banks could consider the Aadhaar biometric authentication along with the MagStripe as an additional factor of authentication for card present transactions at ATMs and POS terminals”.
The central bank further said that in order to take this process forward, a pilot project using Aadhaar as an additional factor of authentication for card present transactions had been scheduled to be held in Delhi from November 15.
“Based on the outcome of the pilot project, further steps would be taken by the Reserve Bank,” the policy has stressed.
The RBI move clearly indicates to the government’s intentions of maximizing the presence of Aadhaar-based authentication system in the financial system in the country.
Prime minister Manmohan Singh launched the nation-wide Aadhaar-based payment system for payment of subsidies and entitlements from Dudu, Rajasthan this month and has also created under him a high-level national co-ordination committee for expediting the implementation of direct cash transfer mechanism.
The architecture of Aadhaar-based national payment system was also announced recently to support the creation of this framework across the country.
In various pilots in the districts identified by the government throughout the country, opening of bank accounts, payments associated with MNREGA and pensions and LPG distribution are among the areas being tested for cash transfers through Aadhaar-based payment system.
With this, mobile connections with the help of Aadhaar-based online authentication has also been started at some places.
Enrolment for Aadhaar numbers has crossed 240 million and according to Unique Identification Authority of India (UIDAI) it will cross 600 million by 2014.
