Get unique ID, and get a bank account free

A bank account free with unique identification number (UID) is how the government plans to sell its move to create a database of all citizens. Those who get the UID number will automatically get a bank account.

A bank account free with unique identification number (UID) is how the government plans to sell its move to create a database of all citizens. Those who get the UID number will automatically get a bank account.

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The finance ministry and the Reserve Bank of India officials will brainstorm with UID authority chief Nandan Nilekani and his team on Friday to define the broad contours of the proposal, including technology requirements, know-your-customer norms and other issues. Top executives of public sector banks will also be present in the meeting.

“The idea is to open a bank account for any citizen who has been given the UID and bring him in the banking fold,” the official said.

Banks need not apply the know-your-customer (KYC) norms for individuals while opening a bank account. The government is also looking into providing incentives to individuals by providing a nominal sum to them while opening the account.

More than 50 per cent of the rural households are outside the banking net now.

Plans are also afoot to fully migrate to a smart card-based electronic benefit transfer (EBT) system for payment of wages to beneficiaries of the national rural employment guarantee scheme (NREGS).

The EBT system is also aimed at spreading financial inclusion in rural and remote areas.