Government of India has demonetized Rs. 500 and Rs. 1000 currency at the stroke of midnight rendering 86 percent or 14 lakhs crore of legal tender useless. A very bold move shocked both his friends and foe alike. There has been both felicitations and criticism to this decision as happens in any vibrant democracy. Government is promising a cashless economy as a solution to curb balck money.
For last ten days we have seen lot of queues , chaos and deaths . Patience is running out , business is seriously impacted.
We have only 28 crs jan dhan accounts , meaning only 28crs out of 100 crs adult population can deposit cash into their bank accounts . Rest will have to come to banks , multiple times to exchange their currency. This will severely stress both the citizens and the banking infrastructure of this country.
Country has already enrolled more than 105 crs into aadhaar digital platform, largest in the world.
Aadhaar as a Solution
With more than 85 percent of the population having an aadhaar nos , the same can be used as a financial address linked to your bank or post office account. While government subsidies and DBT are already being paid through aadhaar it can potentially replace a plastic card.
Given the present situation, most of the persons queuing up for currency exchange probably do not have a bank account. This is a great opportunity for the country in “ Getting non bank account holders into the bank or Post office system”.
Open an instant bank jan dhan account through eKYC and aadhaar. Open a separate counter with an aadhar based eKYC system/ Micro ATM and open a jandhan account for the person. Banking system is already having the necessary technology infrastructure to undertake this exercise. Post opening an account redirect the residents to deposit their cash into their jan dhan account and not queue up for exchanging of notes.
Thus, government can have a pulse program to get maximum residents mostly poor , bpl citizens into the banking system within Dec 31st.
With majority of the Indian population having a bank account, we lay the foundation of a cashless society.
Post this aadhaar nos / biometric and otp authentication can be used as a financial address. Instead of printing plastic debit cards government can issue aadhaar nos as financial identity linked to a bank account. All our micro ATM.,s in rural areas are aadhaar enabled or can be made aadhaar enabled. Normal ATM’s can also be made aadhaar enabled. DCB bank has already installed aadhaar enabled ATMs in India where you can do financial transactions with aadhaar no/ biometric authentication instead of card/ Pin. These bio ATM’s can be installed PAN India by all banks including PSU banks.
Once we get more than 60 percent of India into the banking system , we can implement cashless transactions thru cheque, mWallet, ETransfers, UPI etc.
Lets take this as an opportunity, a blessings in disguise and make India a truly digital and cashless country.
