Cooperative Banks to Join Aadhaar Payment Network Under Revised UIDAI Framework

In a significant step towards strengthening India’s cooperative banking sector, the Ministry of Cooperation in collaboration with the Unique Identification Authority of India (UIDAI) and NABARD introduced a revised framework for onboarding Cooperative Banks on Aadhaar-enabled Payment Services (AePS). The initiative was formally discussed in a high-level workshop held in New Delhi, with participation from senior officials and representatives across the cooperative banking ecosystem.

High-Level Participation

The workshop saw the participation of Dr. Ashish Kumar Bhutani, Secretary, Ministry of Cooperation; Shri Bhuvnesh Kumar, CEO of UIDAI; and Shri Shaji K.V., Chairman of NABARD. Officials from NPCI (National Payments Corporation of India), UIDAI, NABARD, and the Ministry of Cooperation were present. Importantly, representatives of all 34 State Cooperative Banks (StCBs), 351 District Central Cooperative Banks (DCCBs), and over 500 participants joined virtually, reflecting the nationwide impact of the initiative.

Sahkar Se Samriddhi: A Vision of Inclusive Growth

In his keynote address, Dr. Bhutani emphasized that the revised UIDAI framework marks a milestone in realizing the Prime Minister’s vision of “Sahkar se Samriddhi”. He explained that onboarding cooperative banks to Aadhaar services would transform them into modern, empowered, and self-reliant financial institutions, capable of delivering digital-first services to millions in rural and semi-urban India.

“This initiative will empower cooperative banks to expand their financial role while ensuring last-mile access to Aadhaar-enabled services. It is a critical step in driving financial inclusion and supporting rural prosperity,” Dr. Bhutani said.

A Framework Designed for Cooperative Banks

Historically, cooperative banks faced challenges in adopting Aadhaar authentication due to cost constraints and compliance requirements. To address these barriers, the new UIDAI framework introduces a simplified and cost-effective model.

Key features include:

• State Cooperative Banks as AUAs/KUAs: Only State Cooperative Banks will be registered with UIDAI as Authentication User Agencies (AUAs) and KYC User Agencies (KUAs).

• DCCBs to Use StCB Infrastructure: District Central Cooperative Banks will leverage the Aadhaar-enabled application and IT infrastructure of their respective State Cooperative Banks.

• Cost-Effective and Streamlined Approach: By eliminating the need for DCCBs to set up independent systems, the process reduces duplication, lowers costs, and ensures consistency across states.

This structure creates a hub-and-spoke model, where StCBs act as the central hub providing Aadhaar-enabled services to their network of DCCBs, thereby maximizing efficiency and reach.

Voices of Support

UIDAI CEO Shri Bhuvnesh Kumar described the framework as robust, forward-looking, and transformative, saying it would help cooperative banks seamlessly adopt Aadhaar authentication and eKYC services.

NABARD Chairman Shri Shaji K.V. assured that NABARD will provide full support in the rollout and implementation. He stressed that the initiative would strengthen the financial ecosystem of rural India by integrating cooperative banks more deeply into the digital payments landscape.

Expanding Financial Inclusion

With 34 StCBs and 351 DCCBs covered under the framework, the Aadhaar-enabled payment system will bring millions of cooperative bank customers into the digital ecosystem. The impact is expected to be profound:

• Greater financial inclusion in rural and semi-urban areas.

• Wider adoption of Aadhaar-enabled Direct Benefit Transfers (DBTs).

• Strengthening cooperative banks’ role in government welfare delivery.

• Increased transparency and efficiency in banking operations.

Towards a Stronger Digital Cooperative Network

This initiative reflects the government’s commitment to leveraging technology for inclusive growth. By integrating Aadhaar-based digital services, cooperative banks will not only modernize their operations but also play a pivotal role in achieving Digital India goals and expanding the reach of formal banking services.

The revised UIDAI framework is thus a step toward a future-ready cooperative banking sector, where technology, affordability, and inclusivity converge to empower millions of farmers, small traders, and rural households.