Finance

FM Nirmala Sitharaman gives banks till March 31 to ensure all accounts are Aadhaar-seeded

Finance minister Nirmala Sitharaman gave banks a deadline of March 31, 2021 to ensure all bank accounts are Aadhaar-seeded and are linked with PAN cards where applicable.

“I would think ideally by December, if not by 31st March, 2021, every account should have a PAN where needed and applicable and Aadhaar in every case,” Sitharaman said during the virtual annual general meeting of the Indian Banks’ Association on Tuesday.

The minister also asked banks to ensure they are using the latest technology applications to close loopholes in the banking system and to promote unified payments interface-based (UPI) digital transactions and Rupay cards to make the National Payments Corporation of India (NPCI) a global brand.

Sitharaman stressed on the need for having Aadhaar-seeded bank accounts to ensure there was no duplication or fake beneficiaries of government welfare schemes that are administered through direct benefit transfer.

With regards to adopting the latest technologies, the minister asked banks to exploit applications like data mining and artificial intelligence to combat issues like double encashing of securities that are being used as collateral in multiple bank branches.

“Such kind of loopholes which exist because your technology applications are not strong enough, I would want banks to ensure that you are now full-proof on exploiting technology,” Sitharaman said.

Apart from ensuring UPI becomes a common parlance in all Indian banks, Sitharman said, “I wouldn’t think it is necessary today in India, when Rupay is becoming global, for Indians to be given any other card first than the Rupay itself,” adding that the NPCI should be a priority.

Amalgamation
Speaking about the bank mergers that were effected on April 1, this year, Sitharaman said the process should be used to grow to scales where the changing demands of the industry and economy can be met.

“It (amalgamation) should now become an organic mechanism to grow and to grow to such scales that the new demands, from industry, from the economy, from businesses, can all be met in a changing world,” she said.

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