Context:
The Aadhaar-based Payment System (ABPS) is now mandatory for National Rural Employment Guarantee Scheme (NREGS) workers’ payments. The government has indicated that exemptions may be considered on a “case-by-case basis.” The NREGS ensures a legal guarantee of 100 days of employment per financial year to adult members of rural households engaged in unskilled manual work at the statutory minimum wage.
Relevance:
GS II: Government Policies and Interventions
Dimensions of the Article:
- Aadhaar-enabled Payment System (AePS)
- ABPS Implementation for NREGS
Aadhaar-enabled Payment System (AePS)
Identity Verification and Banking Access:
- AePS enables bank customers to use their Aadhaar number as their identity to access their Aadhaar-enabled bank accounts.
- Customers can perform basic banking transactions using this service.
Basic Banking Transactions:
- AePS allows customers to perform various banking activities, including:
- Balance enquiry
- Cash withdrawal
- Remittances through a Business Correspondent.
Mandatory Requirements: To avail AePS, customers must meet the following criteria:
- Possess a Bank Account with a Bank participating in AePS.
- Link their Aadhaar to the respective bank account.
Biometric Authentication:
- Transactions under AePS are completed using the customer’s biometric authentication.
- This ensures secure and reliable access to banking services.
Objectives of AePS:
- Aadhaar-based Identity Access:
- Empower bank customers to use Aadhaar as their identity for accessing Aadhaar-enabled bank accounts.
- Basic Banking Transactions:
- Perform fundamental banking transactions, including cash deposits, cash withdrawals, intrabank or interbank fund transfers, balance inquiries, and obtain mini statements through a Business Correspondent.
- Financial Inclusion Goals:
- Support the objectives of the Government of India and Reserve Bank of India (RBI) in advancing Financial Inclusion.
- Retail Payments Electronification:
- Contribute to the RBI’s goal of electronification of retail payments.
- Centralized Routing for Aadhaar Transactions:
- Enable banks to route Aadhaar-initiated interbank transactions through a central switching and clearing agency.
- Government Entitlement Disbursements:
- Facilitate the disbursement of Government entitlements such as NREGA, Social Security pension, Handicapped Old Age Pension, etc.
- Interoperability Across Banks:
- Enable interoperability across banks in a safe and secured manner.
- Foundation for Aadhaar-enabled Banking Services:
- Build the foundation for a comprehensive range of Aadhaar-enabled banking services.
ABPS Implementation for NREGS:
ABPS Utilization Under NREGS (Aadhaar-enabled Payment System):
- Implemented since 2017 under Mahatma Gandhi NREGS.
- Links workers’ 12-digit Aadhaar numbers with job cards and associated bank accounts.
Expansion of ABPS for NREGS Beneficiaries:
- Extended to beneficiaries under the scheme due to widespread Aadhaar availability.
- Ensures safer and faster payment transfers through ABPS.
Aadhaar Seeding and Authentication Statistics:
- Out of 14.33 crore active beneficiaries, Aadhaar has been seeded for 13.97 crore.
- 81.89% of active workers are now eligible for ABPS, with 13.34 crore Aadhaar authenticated.
ABPS Implementation Details:
- In July 2023, 88.51% of wage payments made through ABPS.
Mandatory ABPS for NREGS Workers:
- Initially made mandatory from Feb 1, 2023, with extensions until Dec 31, 2023.
- Mandatory ABPS implementation from Jan 1, 2024, with the mixed route of ABPS and National Automated Clearing House (NACH) for bulk payments.
Exemptions and Technical Issues:
- Exemption consideration for gram panchayats facing technical or Aadhaar-related problems.
- Decision on exemptions to be made on a case-by-case basis until the resolution of issues.
Government’s Response to Criticism:
- Opposition parties criticize ABPS implementation as exclusionary.
- Government may consider exemptions in case of technical issues.
- Accusations of “weaponizing technology, especially Aadhaar.”
-Source: The Hindu
