New Delhi: The Unique Identification Authority of India (UIDAI) has launched a pioneering Aadhaar-based authentication framework specifically designed for Cooperative Banks, marking a significant advancement in India’s digital financial inclusion journey. This rollout comes as part of the International Year of Cooperatives and aims to empower over 380 Cooperative Banks nationwide.
Collaborative Framework Development
The new framework was crafted through extensive consultations with the Ministry of Cooperation, NABARD, NPCI, and stakeholders from the cooperative banking sector. It encompasses all 34 State Cooperative Banks (SCBs) and 352 District Central Cooperative Banks (DCCBs) across India.
Simplified and Cost-Effective Aadhaar Adoption
Key features of the framework include:
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Only State Cooperative Banks (SCBs) are required to register with UIDAI as Authentication User Agencies (AUA) and eKYC User Agencies (KUA).
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District Central Cooperative Banks (DCCBs) will use the Aadhaar authentication applications and IT infrastructure of their respective State Cooperative Banks.
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This design eliminates the need for DCCBs to build and maintain separate IT infrastructure, reducing costs and ensuring smoother Aadhaar service adoption.
Enhanced Banking Services and Customer Benefits
The framework enables cooperative banks to leverage Aadhaar for:
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Faster and secure customer onboarding through biometric eKYC and face authentication.
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Simplified account opening processes, especially benefiting rural and semi-urban customers.
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Direct crediting of subsidies and welfare payments into cooperative bank accounts using Aadhaar.
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Expansion of digital payment services such as the Aadhaar Enabled Payment System (AePS) and Aadhaar Payment Bridge to facilitate seamless transactions.
Impact on Financial Inclusion and Cooperative Banking
This initiative significantly expands the reach and utility of Aadhaar services, reinforcing the role of cooperative banks in India’s financial ecosystem. By enabling easier, secure, and cost-effective digital banking access, the framework supports last-mile delivery of banking services and helps advance the government’s vision of inclusive growth.
Conclusion
The UIDAI’s Aadhaar-based authentication framework establishes a robust foundation for Cooperative Banks to provide enhanced digital financial services, empowering millions of customers across India. This strategic step leverages technology to drive convenience, security, and inclusion—key pillars of India’s evolving banking landscape.
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Source: PIB
