RBI to soon allow Aadhaar for banking transactions 

RBI to soon allow Aadhaar for banking transactions

PUNE, Nov 26, 2012 (Menafn - Mint - McClatchy-Tribune Information Services via COMTEX) --The Reserve Bank of India (RBI) on Sunday said it will soon allow Aadhaar card as an identity proof for banking transactions that will enable banks to ease the KYC (know-your-customer) process for millions of customers.

The central bank will soon issue a circular allowing the use of the Aadhaar as KYC, one of its deputy governors, H.R .Khan, said on the sidelines of Bancon, the annual bankers' conference in Pune.

Currently, then Aadhaar card carries a disclaimer that it cannot be used as an identity to conduct banking transactions.

"KYC norms will be further relaxed soon to allow the use of any one document, which has both address and identity proofs. We will allow the Aadhaar card to be used as proof of identity," Khan said. The central bank is likely to issue a circular in this regard within a week, Khan said.

Khan said routing subsidies through bank accounts under direct cash transfer will enable to improve the efficiency and savings of government-sponsored schemes and various subsidies by eliminating leakages and delays in transfer. Currently, the government offers subsidies to the tune of Rs.3.5 trillion under various schemes to citizens.

On Saturday, Union finance minister, P. Chidambaram had said that the government plans to route payouts of direct cash subsidy to citizens through the Aadhaar-linked bank accounts with a view to improve the efficiency of government-sponsored programmes. The government will begin direct cash transfers on a pilot basis to people in 51 districts in 16 states from 1 January 2013, Chidambaram said.

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