UIDAI's New Framework Boosts Cooperative Banks with Aadhaar Services

The Unique Identification Authority of India (UIDAI) has introduced a strategic framework to incorporate Cooperative Banks into the Aadhaar-based authentication system, significantly advancing digital inclusion and the advancement of last-mile banking. Announced by the Ministry of Electronics & IT on Thursday, this initiative was crafted in collaboration with the Ministry of Cooperation, NABARD, NPCI, and cooperative banks across India. The comprehensive framework encompasses all 34 State Cooperative Banks (SCBs) and 352 District Central Cooperative Banks (DCCBs).

Under this innovative system, the adoption of Aadhaar services is now both simpler and more cost-effective. The framework designates only State Cooperative Banks to be registered with UIDAI as Authentication User Agencies (AUA) and eKYC User Agencies (KUA). Consequently, the DCCBs are allowed to utilize the Aadhaar authentication application and IT infrastructure of their respective SCBs without needing to manage separate IT setups, thereby reducing costs and ensuring smoother, more efficient banking operations. This arrangement empowers cooperative banks to use Aadhaar-enabled services for prompt, secure, and efficient customer onboarding, facilitating easier processes such as biometric eKYC and face authentication, particularly benefiting rural and semi-urban areas.

Moreover, the new framework enables cooperative banks to expand services like the Aadhaar Enabled Payment System (AePS) and the Aadhaar Payment Bridge, thereby reinforcing digital transactions and propelling financial inclusion within the cooperative sector. This initiative marks a significant triumph in widening the applicability and impact of Aadhaar, reaffirming the essential role of cooperative banks in India's financial landscape.

(With inputs from agencies.)