1. India’s journey towards digital Financial Inclusion
RS Sharma
Chairman, Telecom Regulatory Authority of India (TRAI)

2. Issues Covered Financial Inclusion Challenges
Digital ID Infrastructure
How does it solve FI Problem
Some of the programs and their scale
Roadmap of Financial Services

3. FI Challenges Lack of documents for KYC Lack of banking infrastructure
Cost of financial transactions
India – low value and large volumes
Technology driven ubiquitous banking is the only solution

4. India’s Digital ID Infrastructure

5. Digital ID Infrastructure : The Context
Provision of a robust, reusable ID to those who do not have any formal ID document
To clean up existing databases from ghosts and duplicates
Improve Targeting and Service Delivery
Reduce cost of Delivery of Services

6. 1234 5678 9012 Unique Lifetime Name DoB/Age Gender Address
Mobile/
Unique
Lifetime
What is Aadhaar

7. Features of Aadhaar Only Numbers – No Smart Cards
Random Numbers – No Intelligence, No Profiling
Voluntary in nature
All Residents – Including Children
Uniqueness – Ensured through biometric attributes
No Guarantees to Citizenship, Rights, Entitlements
Ensuring Security and Privacy of Information
Ubiquitous Authentication – From No ID to Online ID

8. More than 1 Billion in 5 Years
Source: Data from

9. Service Delivery Potential of Aadhaar
Uniqueness and Existence ensures no fakes or duplicates
KYC for multiple services : Bank accounts, Financial inclusions, Mobile Connections, Social Assistance Programs
Entitlements should reach the intended beneficiary – non-transferability can be ensured by authentication at the point of service delivery
Many domains will be able to use as a proof of presence for the beneficiary
Identity platform for various domains
Aadhaar online authentication provides a common platform which can be used across all applications.

10. Aadhaar-based Technology Enablers for Financial Inclusion
Open Bank Accounts using Aadhaar
Linking of Aadhaar to existing bank accounts
Aadhaar Payment Bridge (APB)
Simplifies disbursal of funds – uses only one account for all disbursals
Aadhaar Enabled Payments System (AEPS)
Inter-operable, portable anytime anywhere
Transactions (AEPS)

11. A direct pipe to the Resident

12. Access, Cost and inter-operability are the key factors to take Jan-Dhan forward
Onboarding Cost
Break Even Investment
Target Market Size
Rs 1500
Rs 300,000
3M Households
Rs 100
Rs 20,000
34M Households
Rs 10
Rs 2,000
105M Households
Source: NCAER-CMCR survey, discussions with ScripBox

13. Opening Bank Account – Instant & Paperless
Aadhaar e-KYC (Know Your Customer), approved by the regulator (RBI) allows instant access to digitally signed Aadhaar via online authentication.
Bank account can be opened instantly in a presence-less (remotely) and paperless fashion!
Ram
KYC Service Agency
1. Instant A/c request
6. Instant Activation
4. e-KYC
UIDAI
e-KYC Service
5. KYC details:
Name, Address, Date of Birth,
Gender, Photo,
Mobile,
3. Forward to KSA
2. Account activation
request
(Aadhaar + Biometric/OTP)
Service Provider
Field Agent
Ram goes to withdraw cash
Explain MicroATM
TransferMoney txn, with fingerprint to merchant bank
NPCI authenticates the resident using UID, gets bank account using the ID mapper
Executes the debit and credit transaction
Sends SMS to resident and BC about debit and credit respectively
BC gives resident the cash.
Any Bank, Any Mobile, Any BC – no hardwiring of components or vendors – thru UID higher level of abstraction
MicroATM can perform all txns - Can perform deposits and C2C transfers as well.

14. Sending Money to Aadhaar Holder via Aadhaar Payments Bridge (APB)
Governments, organizations, and individuals can transfer money to residents by specifying the Aadhaar number and amount.
State Governments
Any Accredited Bank
Government of India
NPCI +
270 million already mapped
Any bank of customer choice
Employers
140 million DBTs occurring every month in LPG subsidies. Portability of Bank Accounts!
Family, Friends

15. Cash-in, Cash-out, Transfer
ID mapper
Resident - Ram
UID
8. Info- IVRS/ SMS
6. Debit
4. Authenticate and execute
Ram’s bank a/c
5. Authenticate
NPCI switch
1. Withdrawal request
9. Cash
7. Credit
TransferMoney
From UID
To UID
Amount 300
3.NPCI request
2. Money transfer instruction + biometrics
BC’s bank a/c
BC (Kirana, SHG, PO etc))
With Micro-ATM
UID:

16. Payments through Micro-ATMs

17. Frugal Digital Banking : Tech Enablers
Digital ID Infrastructure – Aadhaar – Online and Authenticable
e-KYC, e-Sign and Digital Locker
APB and AEPS – perfected and working at scale
Smart phones with authentication device provide Single Click two factor authentication systems
Cost-effective, frugal banking with millions of devices will remove ‘financial untouchability’

18. India is enabling this revolution by multiple layers of technology
COMMERCE
(GSTn)
CREDIT
(RBI)
INVESTMENTS
(SEBI)
SKILLS
OTHERS
Provides a modern privacy data sharing framework
Open Personal Data Store, E-sign
CONSENT LAYER
Game changing electronic payment systems and transition to cashless economy
IMPS, AEPS, APB, and UPI
CASHLESS LAYER
I N D I A S T A C K
Rapidly growing base of paperless systems with billions of artifacts
Aadhaar e-KYC,
E-sign, Digital Locker
PAPERLESS LAYER
Unique digital biometric identity with open access of nearly a Billion users
Aadhaar Authentication
PRESENCE-LESS LAYER
JAM Jan Dhan, Aadhaar, Mobile

19. THANK YOU