Only 14 banks ready to get linked with Aadhaar Pay
Even as the government is working on a war footing to launch the much touted Aadhaar Pay - the biometric-based payment system announced by Prime Minister Narendra Modi in December - the country's top banks are dragging their feet on its precursor which is the Aadhaar payment option in the
BHIM app.
The feature, which enables payment to an Aadhaar number linked to a bank account, was made live on the BHIM app about a month ago. However, only 14 banks - relatively small in size - have enabled the feature so far. Almost all the large banks such as the State Bank of India ( SBI ), HDFC Bank or Punjab National Bank (PNB) are yet to come on board.
The delay has miffed some in the establishment who feel that since almost 112 crore people have Aadhaar and 40 crore bank accounts are already linked to the unique identity number, the payment option can provide a big boost to digital drive. Industry insiders say delay could be because, due to the government digital drive banks are being asked to activate so many features simultaneously, such as the recently launched
BharatQR code , and Aadhaar-enabled payments, leading to a lot of burden on them. People on the other side, however, said that banks are not in favour of these new transaction methods since it may cannibalise on their debit card or credit card usage which gets them a per-transaction fee.
"When 14 small banks can go live in a month's time, why can't the big banks do it," a government official said, adding that even before BHIM, when banks had to launch their individual UPI apps, the feature was not enabled by them.
When asked, spokespersons of SBI and HDFC Bank told ET that the integration work is in progress and the feature will go live "soon", without specifying any timeline.The official said that the unavailability of big banks was really scuttling the drive since a major chunk -90-95% -of the Aadhaar-linked bank accounts are with the large banks.
"Unless the SBIs, PNBs or the Bank of Barodas' of the world don't enable the feature, how will the transactions happen?" While 17 million people have downloaded the BHIM app so far, Rs 361 crore worth of transactions have happened through it. The value of transactions has also increased from Rs 21.3 lakh per day on December 30 to Rs 25.73 crore on February 13. The official added that transactions through the Aadhaar feature on BHIM are "minimal" so far. "Out of the 40-crore linked accounts, 39 crore are with the big banks, if they are not on board, where will the transactions come from?" said the person.
Announcing the Union Budget, finance minister Arun Jaitley had set a target of achieving 2,500-crore digital transactions in 2017-18.
Fearing transaction failures, the government is also resisting from launching a media campaign to educate people about the feature till a majority of the large bank come on board.
"Suppose we go all out with feature and people try to send money to a bank, which has not enabled it, then they will say BHIM is not working. We don't want that to happen," added the official. Only one large bank, ICICI, has enabled the feature so far, and the integration has also happened only this week.
Only 14 banks ready to get linked with Aadhaar Pay, Telecom News, ET Telecom
