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New UIDAI Framework Empowers Cooperative Banks with e-KYC, Authentication Services
Digital Payment: Under UIDAI's revised framework, cooperative banks will now be able to offer Aadhaar-enabled payment services. This initiative will further expand the reach of digital financial services in rural and semi-urban areas. The new framework addresses long-standing challenges that had kept cooperative banks out of the Aadhaar authentication system due to compliance cost issues.
The Unique Identification Authority of India (UIDAI) issued the updated framework, enabling cooperative banks to provide Aadhaar-enabled payment services. Secretary, Ministry of Cooperation, Ashish Kumar Bhutani said that this step will further increase the penetration of digital financial services in rural and semi-urban regions. He indicated that this move will be significant in establishing more efficient and autonomous financial institutions from cooperative banks.
The new scheme resolves long-standing issues that had held cooperative banks back from the Aadhaar authentication process because of issues of compliance cost. UIDAI designed the simplified system in consultation with the Ministry of Cooperation, NABARD, NPCI, and cooperative banks.
Under the revised framework, only 34 State Cooperative Banks (STCBs) will be registered with UIDAI as Authentication User Agencies (AUAs) and eKYC User Agencies (KUAs). 351 District Central Cooperative Banks (DCCBs) will be able to utilize their respective state banks' Aadhaar authentication infrastructure, eliminating the need for separate IT systems.
