USE its various applications is leading to

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Aadhaar is a 12 digit unique identity number issued
to every single Indian occupant in view of their biometric and statistic
information. The information is gathered by the Unique Identification Authority
of India (UIDAI), a statutory expert built up in January 2009 by the Government
of India. Aadhaar is the world’s biggest biometric ID framework, with more than
1.19 billion enlisted individuals starting at 30 Nov 2017, representing more
than 99% of Indians matured 18 or more. World Bank Chief Economist Paul Romer
depicted Aadhaar as “the most sophisticated ID program on the

This paper highlights how this biometric id and how its
various applications is leading to strengthening of financial infrastructure by
increasing financial inclusion and reduction in financial frauds but is also
leading to human capital development due to availability of more demographic
information and by checking infiltration. It is acting as a catalyst in
development process and is paving way towards sustainable development of the



paper presents a brief review on Aadhaar card, and discusses the scope and
advantages of linking Aadhaar card to various systems.

study the relationship between Aadhar cards generation and financial inclusion.

determine if there is any linkage between Aadhar card and infiltration and

it is leading to sustainable development by strengthening financial
infrastructure and human capital



literature survey based on the various research articles, leading newspapers,
case studies and the observations of Supreme Court of India.

data obtained from UIDAI and other government sites has been used.

has been used to determine any relationship, if it exists.



The Unique Identification Authority of India
(UIDAI) was set up by the Government of India in January 2009. The first set of
UID cards were issued in September 2010, by UIDAI which has been authorised to
issue an Aadhaar number to all the residents of India with the following

 (a) to
create a robust system which is capable enough to eliminate duplicate and fake
identities, and (b) can be confirmed and validated in a
simple and financially savvy way online anyplace, whenever. It   also aims (c) to facilitate smooth
functioning of government schemes and programs. This 12-digit number
which is issued by the government as a proof of identity and residence in India,
is verifiable by means of
biometric identification
system which contains Demographic data that is, data about the person’s: Name,
Address, Gender, Date of Birth, Relationship, Mobile Number and Email And
Biometric data which consists of data about the resident’s: face (photo), IRIS and



organisation whether it private or government cannot function effectively or
efficiently without having information about its subjects. KYC (Know Your
Customer) is an example of how this information is being collected and
verified. In KYC, a person has to fill his personal information, demographic
details etc and provide documents in support of the given details. The
disadvantages of KYC are that it endeavours to record frauds, requires more
human exertion, human obstruction, and less accessibility and so on.

In order
to overcome this UIDAI started “Aadhaar e-KYC (Electronic-Know Your Customer)
eService” in which KYC would be on its own be loaded with the details of
interest via Aadhaar card. The principle idea behind its execution is that it
offers biometric based validation which removes all the additional machine
works required to store and record all the biometric subtle details of a
person. The Income tax Department is likewise is considering- to issue PAN
(Permanent Account Number) card on the premise of Aadhaar e-KYC. Truth be told
NSDL (National Securities Depositor Limited) and UTIITIL (UTI Infrastructure
Technology and Service Limited) are now giving Aadhaar e-KYC Services.  the Government of India has now announced
that the Aadhaar card must be connected with the PAN card by 31 December, 2018
and PAN card would be compulsory for inn charges above Rs.50,000 and gems purchased
for above Rs. 2,00,000. Likewise for citizens, it is obligatory to now link
their Aadhaar cards with their respective PAN cards before July 1, 2018 else,
their filings would be rejected.  The
article of Roy 21 gives a concise survey on how by connecting bank details with
demat accounts or record to frame a solitary record.  This application of biometric id that is
Aadhaar can be extended to essentially cover field all kinds of financial resources
like provident Funds, pension plans and demat account etc. These money related
resources of an individual can be consolidated into a one single unit with the
linkage to Aadhaar number. Connecting Aadhaar to every single financial asset
in distinctive banks will help in easy access and verification process in
banking sector etc.

of this are that firstly, it saves time and money as the whole process is free
of cumbersome paperwork and human interference. Another benefit of e-KYC is
that it ensures that money goes to right person only and pilferages have been

enabled payment:


Total approved transaction in million











 The above table shows
transaction done via Aadhar cards authentications and it can be concluded that
it grew by 3.6% during past years.

Source: npci,uidai



there are numerous types of frauds in financial setup ranging from-

1.      ATM frauds,

2.      phishing ,

3.      pin cracking,

4.      identity theft,

5.      credit and debit card theft etc

6.      tax evasion ,

7.      money laundering etc

some facts related to these frauds are:

the value of trades executed on the Bombay
stock exchange (bse) using fake or duplicate pan cards amounts to Rs 4,000

Indians might have stashed us$ 181 billion
worth black money in global tax havens.

data security of nearly 32 lakh debit cards
has been at risk in atm’s etc

There has been $3 billion loss in the last one year due to banking

Monetary losses amounting to 948.64 lakh due to credit card thefts
in December 2012 .


Keeping  the above facts in mind, Application of
Aadhar cards in banking sector has been immensely beneficial as it helped in
mitigating financial frauds like credit, identity and debit card theft etc. There has been $3
billion loss in the last one year accounting to banking fraud. If every bank
account is verified with Aadhaar then financial crimes can be mitigated as every
fraudster would endeavour to take out money from one account to another, but
whichever is the recipient account if that account is verified with Aadhaar, it
can be prevented.

of Biometrics in E-Banking

Biometrics for Online Banking: Many PC’s, cell phones etc have inbuilt webcams
and unique mark scanner features. These empower the banks to introduce the
biometric arrangement utilizing voice, for voice or face recognition, finger
vein acknowledgment and so forth. Banks are currently offering unique mark
verification through mouse which enables the client to securely process
transactions etc over the web.

 2) Biometrics in Branch Banking:  Since biometrics delivers quick results so
most of the bank branches are using biometric arrangement with specific end
goals in order to reduce the human surge in branch.

 3) Biometrics in ATMs:  biometric authentication in banks will and is
providing outstanding benefits to both parties.

 5) Additional Security & Effective
Password Management: Biometric single sign on (SSO) removes the threat of
password hacking and loopholes thus providing a more secure system of security
to customer as well as bank.


Compulsory connection of the Aadhaar
to Permanent Account Numbers (PAN) has helped the IT division get rid of copy
PANs and decrease tax spillages. In similar manner, connecting financial bank
accounts to Aadhaar, they contend, will help bind tax evasion by means of
benami exchanges. For the client, connecting the account gives immediate access
to the account through the Aadhaar-Enabled Payment System (AEPS).  Total savings in the last two years due to
linking of Aadhaar in beneficiary databases is more than $10 billion. It’s been
reported by Mr. A.B. pandey  CEO of UIDAI
that if we connect all government programmes with Aadhaar then we can spare to
the tune of $10 billion per year.



Aadhar card not only is helpful in building a better financial
system by bringing in transparency as day by day all banks are linking Aadhar
card with bank accounts of clients. It is also helping our human capital
development by providing better information about demography, their actual
needs and ensures that special training and education including skill
development programs, targeted at the community is actually delivered to them.
This has been shown in the diagram below where demographic authentication has
been plotted against months revealing an increase in correct information being
received by government. Many institutions/ training organizations have been
exposed that were earlier claiming such subsidies/ aids on bogus names.

Recently, after the introduction of Aadhar cards the HRD ministry
has identified around 80,000 ghost lectures in the educational sector. Such
cases are now noticeable. Then in case of Scholastic Scholarships: To avail
scholarly grants and take other advantages, students are now required to give their
Aadhaar cards along with the forms etc. By this, the administration has not
only strike out numerous phony people with fake degrees etc as the process is
connected with Aadhaar. It has been reported that many UGC grants have been
stopped of those people who weren’t eligible of the same due to this Aadhaar
card being incorporated.



Source: UIDAI

Not only
in educational sector but otherwise also, Aadhaar cards have reunited around
500 families in India due to increased biometric authentication and information.
The above graph reveals the
trend and demographic informational increase.

In most
recent 2 years, because of Adhar card being connected to different records,


? 3.3 crore “phantom”
LPG associations blocked.


? 87 lakh “phantom”
occupation holders under MNREGA and comparative plans have been evacuated.


? 19 lakh “fake”
accounts which were getting agricultural subsidy in Maharashtra alone were
wiped out.


? 8.2 lakh “ineligible”
children who were selected for mid day meals have been removed.


? About 80,000
“apparition” instructors and teachers in schools and universities who
were drawing pay rates and ugc grants have been cleaned.


? About 31 lakh
“phantom” subsidy and ration cards have been wiped out after DBT
being connected with Aadhar.



Identity of a native in the
wake of penetrations from neighbouring nations might be portrayed as the
“missing connection” in India’s endeavours to ascend as a superpower.
Aadhaar might be named as the innovation drive in the right direction. The UID
“Aadhaar” project has two unique features. The first is that it deals
with “national security” and the other one is its
“formative” concern. Both the components are similarly imperative.

So far the beneficiary of
advantages- under different government supported plans required to build up his
identity and qualification by delivering numerous records for confirmation. The
check of such records is finished by different specialists. An Aadhaar
empowered financial balance (account) can be utilized by the recipient to get
numerous welfare instalments rather than the one plan, one bank approach. It
can be concluded after analysis that application of Aadhar cards will lead to
financial inclusion as cost reduction leads to inclusion and Aadhar enables it.
Aadhaar will not only to financial inclusion and social security but will also
have positive effect on all fields. Countries ranging from Bangladesh to
Tanzania are taking assistance from India to carry out a system like Aadhaar. Our
analysis also supports this view point and suggests that it indeed is leading
to sustainable development which isn’t just about environment but includes well
being of factors like human capital and financial capital etc.





Chopra and Hamza, (2013) inferred
that UIDAI can, and will assume an extremely fundamental part in making money
related consideration genuine and impactful. In any case, extensive front-end
work must be done, and numerous obstructions evacuated, before unbanked poor
can understand the effect. Shah and
Pandey (2015) featured that Aadhaar information is probably going
to make an enormous open door for customising services and administrative work and
offerings. The findings of the paper entitled ‘A cost-benefit
analysis of Aadhaar’ published by The National Institute of public finance
suggest that the benefits of the Aadhaar project will surpass the costs.
Research by state of Aadhar by IDinsight , reveals that Aadhaar enabled payment
gateways and its applications will have a great impact on financial inclusion,
social security , health care and educational sector but it has to overcome
hindrances like security and encryption issues.


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