UID to help banks skip customer antecedent checks

By | December 30, 2009

In the near future, banks may be able to do away with the “know your customer” process. This is a possibility once a sizeable chunk of population gets a Unique Identification number. Addressing the press after attending a meeting organised by the Reserve Bank of India (RBI) on Friday on using UID for financial inclusion, a top public sector bank official said that, once the UID number of a person was activated, banks could do away with KYC norms for small-value, or no-frills, accounts.

During the meeting, The Unique Identification Authority of India Chairman, Nandan Nilekani, made a presentation on how UID could help expedite the financial inclusion process. The meeting was attended by Who’s who of the banking fraternity such as SBI Chairman OP Bhatt; MD and CEO of ICICI Bank, Chanda Kochhar; MD and CEO of HDFC Bank Aditya Puri; and Chairman and MD of Punjab National Bank KR Kamath.

While the proposed scheme will bring a large measure of relief to banks, development of the UID database is going to be a long-drawn process in a country like India with its one billion-plus population.

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About Pradeep Yuvaraj

Pradeep Yuvaraj is a Co-Founder and Director at Finerva Financial Solutions Private Limited, a financial education company focused on personal finance education. He has penned over 250 articles relating to Personal Finance and clocked over 500 hours of educating individuals on managing personal finance. He is a serial entrepreneur and has been associated with 7 Start-ups. His entrepreneurial experience spans industries as varied as Education, Gas Engineering, Automobile Design, Software development and more recently a Pure play presentation design company. Prior to turning entrepreneur in 2005, he has worked for 3 of the top ten companies of the world - Shell, ExxonMobil and Total SA. This experience included handling Branch Operations, Channel Sales and Business Development across 5 states over a period of 8 years. He holds an MBA from Symbiosis and an Electronics Engineering Degree from the University of Pune.

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