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Finance Minister directs banks to promote Rupay cards, link all accounts with Aadhaar by March 2021

Nirmala Sitharaman
Nirmala Sitharaman. Source: @nsitharaman/Twitter

Bankers have been told to only promote RuPay cards, the domestic card network developed by the National Payments Corporation of India (NPCI), over other card networks. Finance minister Nirmala Sitharaman told bankers to discourage non-digital payments as much as possible, promote digital payments and the Unified Payments Interface (UPI-driven payments system and ensure that NPCI becomes a “brand India product which can be promoted elsewhere in the globe.” She was speaking at the 73rd annual general meeting of the Indian Banks Association, held virtually on Tuesday.

Sitharaman said she didn’t think it was necessary for banks to issue any cards other than RuPay ones, especially when the card network is going international. In August this year, the NPCI set up NPCI International Payments Ltd to take its UPI and RuPay card platform abroad, in the hopes of helping payment companies and banks in foreign countries develop and upgrade their retail payments systems.

“RuPay card will have to be the only card you promote. Whoever needs a card, RuPay will be the only card you would promote and I would not think it is necessary today in India when RuPay is becoming global, for Indians to be given any other card first than RuPay itself,” Sitharaman said.

While RuPay was developed and launched by the NPCI in 2012, card issuances on the domestic network picked up under the Pradhan Mantri Jan Dhan Yojana (PMJDY) which was aimed at improving financial inclusion for the unbanked population of the country. While there are PMJDY RuPay cards, the card network also has variants for other government schemes such as Kisan Credit Cards, Pradhan Mantri Mudra Yojana RuPay cards and RuPay PunGrain Card for grain procurement. Further, as part of the recent festival advance scheme announced last month, the government will issue pre-loaded RuPay cards government employees for the advance value. As of January 2020, a total of 600 million RuPay cards have been issued by 1,100 banks, according to data on RuPay website.

“The second thing I want you to consider is how far technology is benefiting the customer and also how far you are able to use technology, use data mining and artificial intelligence there is no overlap, no double en-cashing of securities and such kind of loopholes which exist because your technology driven applications are not strong enough. I would want banks to ensure that you are now foolproof to exploiting technology for yourselves so you are better managed banks, and for the customer,” Sitharaman said.

Link all bank accounts to Aadhaar

During the meeting the Sitharaman also told bankers to link all bank accounts to Aadhaar cards and Permanent-Account-Numbers (PAN) by March 31, 2021, if not by December this year. “The financial inclusion story is not over, you still have inclusion to carry forward. You still have so many out there who still do not have a bank account,” she said. The Finance Minister said that she does not want banks to have accounts that are unverified or that there duplicate accounts within their systems due to a lack of Aadhaar or PAN seeding. “I do not think beyond December this year, I can even be patient to hear that there are still accounts in banks which are not yet Aadhaar-seeded,” she said.

“I would want you to ensure that every account you have has PAN card, where required, and Aadhaar in every account seeded. Otherwise, I think we are still saying excuses rather than benefiting from technology,” Sitharaman said.

According to the Ministry of Electronics and Information Technology’s DigiDhan dashboard, around 86.84% or 115.38 crore bank accounts were seeded with Aadhaar as of June 26, 2020.

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