Declaration of 25th January as the National Voters’ Day every year

The Union Cabinet  approved declaration of 25lh January every year as the "National Voters' Day" beginning from this year and to provide voters a badge with its logo and the slogan “Proud to be a voter – Ready to vote”.

The Constitution (Sixty-first Amendment) Act, 1988 was enacted to amend article 326 of the Constitution lowering the voting age from 21 years to 18 years so as to provide the unrepresented youth of the country an opportunity to give vent to their feelings and help them become a part of the political process.

It has been noticed that the new voters (18+ age) are not getting enrolled in the electoral roll in a big way year after year. In certain cases, the level of their enrolment is as low as 20 to 25%. In order to effectively deal with this problem, the Election Commission has decided to take up a vigorous exercise to identify all eligible voters attaining the age of 18 years as on 1sl of January every year, in each of the 8.5 lakh polling station areas of the country. Such eligible voters shall be enrolled on time and handed over their Elector Photo Identity Card (EPIC) on the 25lh January every year at a brief felicitation to be organised in each polling station area. This initiation is expected to give the youth a sense of responsible citizenship, empowerment, pride and participation and inspire them to exercise their newly acquired franchise, when occasion arises.

Revised Cost Estimate of the Project for “Setting up of a World-class Drug Research Institute” at Lucknow

The Cabinet Committee on Economic Affairs today approved the proposal of CSIR for the Revised Cost Estimate of its project of setting up a world-class drug research Institute (CDRI) at Lucknow. The estimated cost of the project has been enhanced from Rs.190 crore to Rs. 322.51 crore.

The project is likely to be completed by March 2011.

The proposed facility would generate a world class infrastructure to nurture research and innovation in the area of drug discovery and development and benefit all sections of the society.

DDA clarifies onflats quality

NEW DELHI: With reference to the news item titled "Rs 2 crore Village flats good only for 20 years", DDA has issued a clarification that all concerns mentioned by CBRI in its 13 reports have been acted upon and action taken report submitted to CBRI which in a latter e-mail had written to the DDA that all concerns except leakage and seepage in the upper and lower basements and mock demonstration of both active and passive fire protection systems have been addressed.

"CBRI's satisfaction regarding quality of work is again reinforced and reflected from the fact that they approached DDA in NOvember 2010 to allot 10 flats to their parent organisation that is CSIR in Games Village," DDA's commissioner (PR) Nemo Dhar has written.
TOI replies: The news item in question did not quote from the CBRI reports. It quoted from a CAG letter that was sent to DDA last week asking why action had not been taken on these observations. The letter quoted extensively from the 13 CBRI reports. 

Courtesy: TOI

Rs 2 crore Commonwealth Games Village flats good for only 20 years?

NEW DELHI: They might have been sold for Rs 2 crore-plus but if a report by the technical experts of Roorkee's Central Building Research Institute is to be believed, flats at the Commonwealth Games Village are so shoddily built that their lifespan may not be more than 20 years.

Despite 13 damaging reports from CBRI, DDA took no action on the glaring construction flaws in the Village, including lack of waterproofing that could cause flooding in the basement, that was pointed out as early as November 2009. Seepage had caused a lot of concern during the Games.

Widely quoting from the CBRI reports, CAG has now asked DDA to explain within a week why action wasn't taken on these reports during the construction of the complex. The letter, of which TOI has a copy, was received by the land-owning agency on Thursday.

Audit memo no. 16 points out how the third-party independent quality assurance agency had been appointed by private developer Emaar MGF eight months after the start of the project even though the project development agreement clearly stated that it should be appointed within three months for the purpose of testing raw material and monitoring construction activities. When CBRI entered the scene, the quality of the work (pile/ foundation work) executed by the developer upto May 2008 in this sensitive area of river bank could not be assured.

It is observed that nothing was found in the records produced to audit which assured that the quality work was checked by any other agency or the DDA quality assurance team, reads the letter.

In one report — of which TOI has a copy, — CBRI says: On seeing the permeability of the concrete and the corrosion of the reinforcing steel it gives an impression that, the service life of these towers can not be more than 20 years. These towers demand lot more expendure for the repair and retrofitting beyond this period. The audit memo points out that the reinforcing steel was never covered adequately despite three reports pointing to that deficit. The reinforcing steel is more prone to corrosion when exposed to moisture, oxygen, acidic environments and chlorides, which is why it is required to be covered. In many places there was chipping of the cover concrete.

The improper beam-column joints were warned about in six of the 13 reports yet nothing was done about them, the memo alleges, asking for an explanation. Sources say the gap in some joints is so huge that there are birds nests there. When TOI contacted DDA for a response on the observations in the memo, director (PR) Nemo Dhar maintained: An audit memo is for being answered to the auditor not to the media.

DDA sources however concede that the matter had indeed been raised time and again and nothing much done about them. The state of the buildings now is such that retrofitting them is the only option and that is going to cost another half to one-third of the money already spent on these flats, said a senior DDA official on condition of anonymity. It was observed that CBRI pointed out (report number 3) that many columns in the basement floors of towers 3,4,5 were out of plumb and some of them are tapered (the width reduced from 300 to 230 mm).

This situation pose serious problem in the event of severe earthquake as the construction site is located in seismic zone IV that too on alluvial soil. The above matter has been reported by CBRI to the EmaarMGF, ACIL and DDA and also has been requested to see that no cosmetic treatment (plastering) was to be made as it would be difficult to identify these columns at a later stage, when the decision was taken to repair and retrofit these columns. Nevertheless these columns had been plastered to cover up the deficiencies, the CAG letter reads.

The memo also talks about how the reinforcement of beams and columns was improperly done even though the matter figured prominently in the first three CBRI reports. In their tenth report, CBRI is quoted in the memo as saying: Though we are insisting for the cover blocks and the bending of hooks for the last one and half years, the same is being neglected very deliberately. Unfortunately, many times no civil engineer is seen at the site. The construction site is left to the mercy of bar benders and foremen. 
Courtesy:  TOI

Notional promotions not bereft of monetary benefits: CAT

New Delhi, Jan 4 (PTI) Even a notional promotion accorded to a government servant cannot be bereft of its consequential monetary benefits, including pension and arrears, the Central Administrative Tribunal has ruled.
"If a wrong is done, consequential benefits must be given on notional promotion," said the CAT's Delhi-based principal bench, while asking Delhi Police to accord all pecuniary benefits to one of its officials, who had been earlier given notional promotion by it after his retirement.
The CAT's principal bench gave this ruling on an appeal by Assistant Sub-Inspector Ishwar Singh of Delhi Police, who had lost his job following his conviction by a trial court in a criminal case, but was eventually acquitted by the Supreme Court, albeit after August 2005, when he had already crossed his age of retirement.
Following his acquittal, the Delhi Police, in April 2008 notionally restored his services for the purpose of grant of pensions etc

50 Paise Coins to be Minimum Denomination Coin Acceptable for Transaction from June 30, 2011 Government Calls in from Circulation Coins of Denomination of 25 Paise and below

The Central Government, Ministry of Finance has notified on December 20, 2010 to call in from circulation the coins of denomination of 25 paise and below, issued from time to time, with effect from June 30, 2011. From this date, these coins shall cease to be a legal tender for payment as well as on account. The procedure for call in shall be notified separately by the Reserve Bank of India.
Consequently, from June 30, 2011 onwards these coins will not be accepted in transactions. The minimum denomination coin acceptable for transaction will be 50 paise from that date. Also, in accounting, i.e. the entries in books of accounts, pricing of products/services/taxes shall also be rounded off to 50 paise or whole rupee from that date. 

The notification was issued in exercise of the powers conferred by sub-section 15A of the Coinage Act, 1906 (3 of 1906).

Housing Loans by Commercial Banks – LTV Ratio, Risk Weight and Provisioning

RBI No.2010-11/324
DBOD.No.BP.BC. 69 /08.12.001/2010-11

December 23, 2010

The Chairmen and Managing Directors/
Chief Executive Officers of
All Commercial Banks
(excluding Regional Rural Banks)
Dear Sir/Madam,

Housing Loans by Commercial Banks –
LTV Ratio, Risk Weight and Provisioning

Please refer to paragraphs 104 to 106 of the Second Quarter Review of Monetary Policy 2010-11 (extracts enclosed), proposing certain measures in regard to housing loans by commercial banks. Accordingly, banks are advised as under:

1. Loan to Value (LTV) Ratio

At present, there is no regulatory ceiling on the LTV ratio in respect of banks’ housing loan exposures. In order to prevent excessive leveraging, the LTV ratio in respect of housing loans hereafter should not exceed 80 per cent. However, for small value housing loans, i.e. housing loans up to Rs. 20 lakh (which get categorised as priority sector advances), it has been decided that the LTV ratio should not exceed 90 per cent.

2. Risk Weight

In terms of circular DBOD.No.BP.BC.83/21.06.001/2007-08 dated May 14, 2008 the risk weights on residential housing loans with LTV ratio up to 75 per cent are 50 per cent for loans up to Rs. 30 lakh and 75 per cent for loans above that amount. In case the LTV ratio is more than 75 per cent, the risk weight of all housing loans, irrespective of the amount of loan, is 100 per cent. Henceforth, the risk weight for residential housing loans of Rs. 75 lakh and above, irrespective of the LTV ratio, will be 125 per cent to prevent excessive speculation in the high value housing segment.

3. Provisioning

It has been observed that some banks are following the practice of sanctioning housing loans at teaser rates i.e. at comparatively lower rates of interest in the first few years, after which rates are reset at higher rates. This practice raises concern as some borrowers may find it difficult to service the loans once the normal interest rate, which is higher than the rate applicable in the initial years, becomes effective.  It has been also observed that many banks at the time of initial loan appraisal, do not take into account the repaying capacity of the borrower at normal lending rates. Therefore, in view of the higher risk associated with such loans, the standard asset provisioning on the outstanding amount has been increased from 0.40 per cent to 2.00 per cent with immediate effect. The provisioning on these assets would revert to 0.40 per cent after 1 year from the date on which the rates are reset at higher rates if the accounts remain ‘standard’.

Yours faithfully,

(B. Mahapatra)
Chief General Manager –in-Charge

Encls: As above

---

Housing Loans by Commercial Banks

Loan to Value Ratio in Housing Loans

104.   At present, there is no regulatory ceiling on the loan to value (LTV) ratio in respect of banks’ housing loan exposures. In order to prevent excessive leveraging, it is proposed:

• that the LTV ratio in respect of housing loans hereafter should not exceed 80 per cent.

Risk Weights on Residential Housing Loans

105. At present, the risk weights on residential housing loans with LTV ratio up to 75 per cent are 50 per cent for loans up to Rs. 30 lakh and 75 per cent for loans above that amount. In case the LTV ratio is more than 75 per cent, the risk weight of all housing loans, irrespective of the amount of loan, is 100 per cent. Accordingly, it is proposed:

• to increase the risk weight for residential housing loans of Rs. 75 lakh and above, irrespective of the LTV ratio, to 125 per cent.

Teaser Rates for Housing Loans

106. It has been observed that some banks are following the practice of sanctioning housing loans at ‘teaser rates’, wherein the loans are offered at a comparatively lower rate of interest in the first few years, after which rates are reset at higher rates. This practice raises concern as some borrowers may find it difficult to service the loans once the normal interest rate, which is higher than the rate applicable in the initial years, becomes effective. It has been observed that many banks at the time of initial loan appraisal do not take into account the repaying capacity of the borrower at normal lending rates. In view of the higher risk associated with such loans, it is proposed:

• to increase the standard asset provisioning by commercial banks for all such loans to 2 per cent.

Remarks by Smt Shyamala Gopinath, DG, RBI at the inauguration of Inter-Bank Mobile Payment Service of the National Payment Corporation of India at Mumbai on November 22, 2010

1. Mr Hota, Mr Balachandran, my colleague Mr Padmanabhan, other executives of NPCI, fellow bankers, other dignitaries and my media friends present here. I am honoured to be here and I thank the NPCI for inviting me to inaugurate the Interbank Mobile Payment Services (IMPS), which has the potential to change the retail payment landscape in India provided all the stakeholders get it right.
2. The success of mobile penetration in India is now widely recognized. This huge success has encouraged it being increasingly leveraged to address other frontier issues of inclusive growth process. Exchange of money, one of the most fundamental economic functions in any economy, is one of such frontline issues. I can do no better than refer to the observations  from a recent book¹ coauthored by  Mr. Sam Pitroda, one of the key architects of telecom revolution in India:  M-commerce is poised for a revolution, commencing in China and India.   It may initially focus on mobile banking and later, with integration of applications for consumer convenience, extend to other services.
3. Intuitively, the mobile phone, being more ubiquitous in nature offers a greater opportunity for effective delivery of financial services and furthering the cause of financial inclusion in a significant way.  With the evolution through Information & Communication Infrastructure, knowledge based initiatives, right to information and education, delivery of public services and employment and entrepreneurship mobile money has the potential to facilitate inclusive growth. .
4. Reserve Bank has acknowledged the importance of mobile banking channel as a critical element to achieving inclusive growth in India and has been taking several important steps, the recent being enabling the mobile companies to partner with banks as business correspondents. The twin challenge in our country would be to succeed in reducing the use of cash while encouraging the spread and use of mobile wallet to reap the full benefits of this ubiquitous product.
5. The three stakeholders viz. the telecom operators, banks and merchants have realized the value proposition and the only sustainable business model is where these stakeholders work together to deliver true value to customers and effectively share the costs saved and new revenues generated. Hence it is imperative that all the three while being cognizant of their strengths, do not lose sight of their weakness and find ways to integrate their offerings without losing their individuality.
6. As far as banks are concerned, the real challenge would be to reorient their business models to exploit the synergies provided by this model while addressing the key concerns.

• Leveraging on  new technology
  
• Extend the existing risk management practices to various delivery channels
  
• Acquire all these transactions over the existing settlement networks
  
• Aggregate various services as part of their existing cross-selling and co-branding initiatives
  
• Fraud prevention and security standards; safeguards against money laundering, KYC issues
  
• Ability to leverage their existing reporting, auditing, and campaign management at back end
  

Mobile Phones for financial services - across the globe
7. World over there has been increased use of mobile phones for extending financial services to the excluded populations.  Two models are mainly evident (i) bank led model and (ii) Non-bank led model.
8. The bank led model involves extending all banking facilities including money transfer facility to bank customers through the mobile channel. This pure bank led model essentially incorporates the whole gamut of financial services like acceptance of deposits, extending loans and also providing money transfer facility. The agents are employed by the banks and are therefore directly responsible for their activities.
9. The non-bank led model which are mainly provided by MSPs. A virtual electronic prepaid wallet on the mobile phone is provided to the customers. Customers can use the amount in the virtual account for remittance/payments for goods and services (M-Pesa, Kenya). The number of such models across the globe is very few. In this model the focus is on providing remittance facility. These models provide a virtual prepaid account held with  the MSP, which can be used by the customer for person-to-person remittance and payments.
10.  In India, it has been decided to adopt the bank-led model.
Mobile Payments in India :
11. The significance of this channel for the development of payment instruments and as payment channel has been recognized by the Reserve Bank. Accordingly the Reserve Bank of India issued the guidelines for Mobile Banking Transactions in October 2008.
12. The guidelines permit banks to provide mobile banking transactions and mandates that all transactions have to originate from one bank account and terminate in another bank account. The guidelines also permit banks to extend this facility through their business correspondents. The mobile banking guidelines were relaxed in December, 2009 to –

1. enhance the daily cap  on both funds transfers and transactions involving purchase of goods and services to Rs.50,000
   
2. Requirement of end-to-end encryption relaxed for transactions up to Rs.1000/- for small value transactions.
   
3. Facilitate funds transfer from a bank account using a mobile phone with cash payout at ATMs/BCs up to Rs 5000.
   

13. Non-bank entities have been permitted, in August  2009, to issue semi closed prepaid m-wallets up to the value of Rs 5000/- with full KYC compliance based on the representation received from Cellular Operators Association of India (COAI) The objective of keeping the limits low was to study the trend and progressively liberalize based on the experience. As on date a total of 6 non-bank entities have been authorized to issue prepaid mobile wallets. This includes one Mobile service provider. Another application is under process.
14. Given that India is still far from being a cash less society, the cash-in/cash-out arrangements in these models play an important part for scaling up. This can happen only if banks and mobile operators/card issuers work together as partners. It is gratifying to note that the high level of Inter-Ministerial Group anchored by the Department of Information Technology, Government of India that went into the issue, after extensive discussions, have reached more or less the same conclusion.GOI has consequently appointed various committees to address issues pertaining to provision of prioritized services for mobile banking transactions and pricing of such services.
15.  The recent relaxations contemplated in enabling mobile operators as BCs of banks should give a further fillip to these efforts.
16.  It has to be appreciated that in India, unlike in Kenya and Philippines, there are a number of    MSPs and a huge base of mobile subscribers. To have an efficient mobile based payment and remittance system would require inter-MSP payment services. This inter-operability is an important criterion for any payment product to be successful and acceptable. Facilitating this would require the setting up of a clearing and settlement arrangement for such non-bank operators. Such clearing and settlement arrangements could have systemic implications. This is where the facility being inaugurated today by the NPCI is filling an important pre requisite for the product to scale up.
17.  RBI has permitted 40 banks to do mobile banking and the customer base availing of mobile banking facilities as on September 30, 2010 stands at 8.87 lakh as compared to 6.16 lakh as at the end of August 2010. During September, 2010, 4.9 lakh transactions of value Rs. 44 crores were carried out  using this mode of payment both for transfer of funds and purchase of goods and services.
Concluding thoughts :
18. While the growth of mobile payments has been rapid, it is far from becoming an important source of financial inclusion. This in my view calls for two important facilitations. One, partnership rather than competition among the stake holders, importantly mobile companies and banks and two, a ubiquitous switch for enabling interbank p to p and p to b payments. While we are working towards achieving the first facility, NPCI has taken the important step of enabling the second important facility.
19. The Interbank Mobile Payment Services (IMPS) provides an inter-operable infrastructure to the banks for enabling interbank real time funds transfer transactions. What may be one of its strongest points, IMPS rides on the existing NFS Interbank ATM transaction switching infrastructure and message format – and hence easy for banks to adopt. It has the potential for the wide reach across the country when all NFS member banks adopt this service and promote this service aggressively.
20. Alongside this, with the recent relaxations in the BC guidelines, I believe that all the building blocks are in place. Now it is entirely up to the various stake holders to take the product forward.  More importantly, what has been facilitated by NPCI today can be construed as yet another step towards achieving its stated vision of becoming a true umbrella organisation for retail payments in this country. I hope NPCI will continue to show equal enthusiasm in commissioning and completing other important projects like the cheque truncation and the much awaited India Card.
21. I too join Mr Balachandran in congratulating the IBA, entire NPCI team and all others who have contributed to the roll out of this product. I wish the NPCI success in all their endeavors.

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Ministry of Finance Notification recognises Aadhaar number for Opening of Bank Accounts

A Ministry of Finance, Government of India, notification dated the 16 of December 2010 has recognized Aadhaar number issued by the Unique Identification Authority of India (UIDAI) as an “officially valid document” to satisfy the Know Your Customer (KYC) norms for opening bank accounts.

This notification is expected to promote the financial inclusion of the poor and the hitherto excluded by making it possible for them to easily establish their identity and open bank accounts.

The UIDAI is facilitating opening of bank accounts for the residents at the time of enrolment for Aadhaar through partner banks and acceptance of Aadhaar as a valid KYC will make the process seamless.

Employees may not be able to challenge CAT judgement in SC

Bad news is in store for government employees contesting matters relating to their service conditions in the Central Administrative Tribunal (CAT) as they may not be able to challenge the judgement in the Supreme Court.

Government employees not satisfied with CAT orders on their service matters will continue to appeal in High Courts as government's plan to enable them approach the apex court directly has received a thumbs down from the top law officer.

Recently, the Department of Personnel had asked the Law Ministry whether the present system of CAT orders being challenged in High Courts be changed to fast track disposal of cases of government employees relating to their service conditions and employment rules.

The Law Ministry referred the matter to Attorney General Ghoolam Vahanvati who opined against the move saying a 1997 Supreme Court judgement on the issue should continued to be followed.

"As of now, the buck stops here (on the issue)," Law Minister M Veerappa Moily told PTI when asked to comment on Vahanvati's opinion.

He said his ministry was trying to find a solution. "But I would not like to add anything more to it," he added.

When the CAT was established in 1985 by an Act of Parliament, its rules clearly stated that its judgements on service related matters of state and central government employees can only be challenged in the apex court.

While the same rules is in operation even today, a 1997 Supreme Court ruling held that judicial review is the basic feature of the Constitution and a High Court's power on judicial review cannot be taken away.

After the judgement, appeals against CAT rulings were entertained in High Courts.

"The Armed Forces Tribunal Act has been borrowed from CAT. Appeals against Tribunal's orders can only be challenged in the Supreme Court. But in CAT's case, it has become a three tier system...the entire purpose of CAT has been defeated," said a CAT functionary.

He said while CAT usually disposes off a case in six months, appeal in High Court often takes years.

"They pay Rs 50 as fee to move CAT, but they have to pay thousands of rupees in High Court...if the matter reaches Supreme Court, the time and cost involved is massive," he said

PARLIAMENTARY STANDINGCOMMITTEE REPORTONTHE ACADEMY OF SCIENTIFIC AND INNOVATIVE RESEARCH BILL, 2010

Open publication - Free publishing - More csir

THE ACADEMY OF SCIENTIFIC AND INNOVATIVE RESEARCH BILL, 2010

Open publication - Free publishing - More csir

Revision of Fellowships/Associatship-CSIR

Tribunal clears air on OBC job

New Delhi, Dec. 1 (PTI): The Central Administrative Tribunal has said the Centre will not reserve jobs for castes considered OBC by states but not by the Union government.

The tribunal passed the order on a petition by four members of the Jat community, recognised as an Other Backward Caste by the Delhi government, who sought appointment to posts reserved for OBCs in the Employees State Insurance Corporation, a central agency.

The petitioners pleaded before the tribunal that since the selection was to be made for the Delhi region, they, as Delhi residents, should be considered for appointment.

But the tribunal dismissed their petitions. The bench headed by V.K. Bali said: “In our opinion.... What is material is that the recruitment is being made for an agency of the central government.”

Departmental inquiry must before any stigmatic order: CAT

Express News Service Posted online: Wed Dec 01 2010, 04:47 hrs

Chandigarh : In a judgment with a far-reaching impact on employees serving on contract basis, the Chandigarh Bench of the Central Administrative Tribunal (CAT), headed by Justice S D Anand, has held that no contractual employee can be terminated by an order which is stigmatic in nature without holding a regular departmental inquiry. The order came on a petition filed by one Karamjit Singh, who worked as Director of Physical Education (DPE) in the Chandigarh Education Department on a contractual basis since August 2001. He was ordered to be terminated by the Education Secretary, UT Chandigarh, on July 23, 2009, on the allegation of resorting to corporal punishment to students while serving in Government Model Senior Secondary School, Sector 47, Chandigarh. Ranjivan Singh, counsel for the petitioner Karamjit Singh, argued that not only was the allegation against the petitioner - that he had resorted to corporal punishment to students on July 22, 2009 - false and baseless but no fair inquiry was held before holding the petitioner guilty. Thus, the termination of the petitioner was against the principles of natural justice, Singh contended. It was pointed out to the Bench that the termination of the petitioner was ordered despite the fact that the alleged victim students and their parents had approached the higher departmental authorities pleading the petitioner’s innocence. Setting aside the termination of the petitioner, the Bench allowed the petition filed by him whereby he claimed his reinstatement with effect from July 23, 2009, continuity of service and arrears of pay.

Safe ePayments: Number of Digits in a Bank Account

Safe ePayments: Number of Digits in a Bank Account: "Number of Digits in a Bank Account The key to a successful ePayment i.e RTGS/NEFT/ECS/Direct Credit is the beneficiary’s correct account n..."

Understanding the UID with Nandan Nilekani

For Nandan Nilekani , the chairman of Unique Identification Authority of India , the challenge now is not just to roll out one lakh or more Aadhaar numbers a day, but to create an ecosystem for players to build applications on top of this identity infrastructure. Now, Nilekani has been negotiating with the Reserve Bank of India to allow banks to treat Aadhaar number as the only document for opening an account. In a free-wheeling interview with Shantanu Nandan Sharma, Nilekani talks about life after Aadhaar when a villager would be able to use a micro-ATM in his locality, or a migrant from Bihar would be able to flash out his number in Mumbai as an identity proof. Excerpts:

You will issue only a number and not a card. That means even after I get my UID number, I will have to carry separate ID proofs?

Nilekani : Whether it’s a passport, a ration card or a PAN card—each one of these has a purpose. Whether they will continue to remain as it is, or merge in the future, it’s a matter of future direction. Fundamentally, what we are giving is an identity infrastructure.

What does the number mean for a citizen?

Nilekani : Broadly, Aadhaar, as it is called, addresses several things. It addresses the issue of inclusion. It’s most important because we have hundreds of millions of Indians who don’t have an acknowledged existence by states. And if you don’t have acknowledged existence, you can’t avail of many public and other services. You can’t rent a house, you can’t get a job. In a way, identity is the foundation for life in some sense. First, it gives a chance to a large part of people who are not in the banking system to be a part of the system.

Second, it addresses the problem of migration. India is already a migrant country. We have 120 million migrant population. And the migration is going to go up in the next 20 years. We can give them a portable identity which they can carry with them and authenticate wherever they are.

What does a migrant do now?

Nilekani : Either he has no identity or even if he has one, say a ration card, the moment he moves out of his area, it does not have any validity. The ration card is a state document, not a national document. What Aadhaar does is that you get a number in one part of the country, and it is valid in all parts of the country. It gives you national portability. Ours is a nationally verifiable identity infrastructure. So it makes identity portable like a mobile phone makes communication portable.

Also, it provides a platform for innovation. The way we have made this architecture, it allows new innovators to build new services on the top of it. Therefore, it can be a platform for delivery.

What’s the road map ahead?

Nilekani : We launched it on September 29, now we have already crossed 100,000 in seven states so far. We are sending the users a letter, and that itself sometime will be a proof of their identity. And we are providing online authentication all over India.

Recently Visa has announced that they will build a card around UID. What does it mean?

Nilekani : Aadhaar provides an identity infrastructure. If somebody is in the financial services—be it Visa, MasterCard , NPCI (National Payments Corporation of India) or even the banks—they can develop a variety of financial products which use Aadhaar authentication as one of the identity proofs. We are providing an open architecture which allows people to build applications on top of it.

Do you see more number of players to come and do business around Aadhaar?

Nilekani : We have agreements with Reserve Bank of India, Indian Banking Association, NPCI, all the banks—all of them are looking at using Aadhaar for financial inclusion.

Will the Aadhaar number be enough as a proof to open a bank account? Will the RBI agree?

Nilekani : One of the major problems for the poor to get a bank account is the lack of identity. And because of security reasons, the KYC (know your customer) requirement has become more and more demanding. The poor is out of this system. We are negotiating with regulators and the finance ministry to allow ‘Aadhaar equal to KYC’ for bank accounts. And if that happens, once you have an Aadhaar number, you don’t need any KYC to open a bank account. This will include many marginalised people into the banking system.

According to the new Bill being introduced in Parliament, you want to change the name UID.

Nilekani : No. Changing the name is just one thing. It’s now National Identification Authority of India . It gives this organisation more stature. The Bill is brought in because we need to have regulation on enrolment and authentication and penalty of misuse, etc. All that requires regulatory architecture.

There is an apprehension particularly in North-East that Aadhaar will give an illegal migrant an advantage to get Indian citizenship?

Nilekani : This is in no way, a citizenship or nationality number. The authorities who provide nationality document will continue to do the same checks.

You have crossed issuing 1 lakh numbers so far? What are the milestones next?

Nilekani : First, we have to stabilise our platform. Since we have rolled out, many small issues have come up which we need to sort. That’s what we are going to do in the next six months. Second, we have to increase the enrolment—from 10,000 a day to 100,000 a day, then we have to scale it up further. That’s a big challenge. Also, we have to launch applications on this infrastructure.

What kind of applications?

Nilekani : For the banking system, once ‘Aadhaar equal to KYC’ is agreed upon, then we will not only make opening a bank account for poor easier, but it will help creating a network of mini ATMs. So, instead of walking 40 kilometres to reach the nearest bank branch, a man in a village can walk into a micro-ATM.

How will a micro-ATM work?

Nilekani : It’s a device, say a mobile phone with fingerprint reader attached to it. You go to a micro-ATM, put your finger, authenticate yourself and withdraw money from your bank account. The micro-ATM will be inside the house of a business correpondent of a bank who will then give money say from a kirana store, and it will be linked to his account. Now, we are doing a pilot project on it.

Any other applications?

Nilekani: We are working how ‘Aadhaar equal to KYC’ may give you a mobile connection. We are discussing it with DoT (department of telecommunications). On the top of these, the government gives a lot of cash benefits like old-age pension, disability pension, widows pension, NREGA payment—all these can flow into the banking system.

What does UID mean for corporate India?

Nilekani : It has many possibilities. The employability can become simpler. Also, people’s benefits can be made more portable. Once the provident fund schemes begin to use it, the benefits become more portable.

Has life changed after joining the Govt?

Nilekani : The life is quite different. I moved from Bangalore to Delhi, moved from private sector to government, moved from running a hundred thousand person company to launch a startup. But overall, I am very happy with what I have done in the last 16 months. It has been a positive experience. It has a few challenges but every job has challenges.

You have recruited a number of bureaucrats as your main deputies?

Nilekani : We have a good mix of people. We have some excellent people from within the government and some from outside, volunteers, private sector people, interns etc. It gives us a diverse intellectual capital which is useful for the project.

But will you return to the corporate sector?

Nilekani : Governance requires a lot of technology-enabled reforms. I think I can help in that area.

Will more corporate people join the Govt?

Nilekani : I don’t want to speculate but if the government wants to bring in more people from outside, we will then have access to a wider talent pool.

What’s after UID?

Nilekani : It’s a big job. I have enough work for four years.

Courtesy : Economic times

24 Hours Payment System By NPCI

National Payment Corporation of India (NPCI) is providing Interbank Mobile Payment Service (IMPS) with seven banks viz, State Bank of India, ICICI Bank, Union Bank of India, Bank of India, Yes Bank, Axis Bank, HDFC Bank. The service allows a customer in one bank to remit funds to an account holder in another bank. Mobile phone is used as a service delivery channel of the member banks. For providing this offer, the bank needs to have authorization from Reserve Bank of India and has to be admitted as a member of IMPS. Till 31st March 2011, NPCI will be providing the service to the member banks free of charges. Thereafter switching fee of Rs. 0.25 per transaction will be levied by NPCI to member banks. Member banks may levy a fee on the customers as per the policy formulated by them. However for the present, they have also been providing this service free of charges.

This information was given by the Minister of State for Finance, Shri Namo Narain Meena in written reply to a question raised in Lok Sabha.

Levy of Cash Handling Charges by Banks

Normally banks do not charge from their customer for depositing money to their own account. However, some banks levy charges for cash payment against credit card bills. Charges are collected at the time of accepting cash. As per the Reserve Bank of India (RBI) guidelines banks need to inform about changes in rates or charges to their customer one month before implementation. RBI vide its circular dated September 7, 1999 had given freedom to banks to decide service charges for various services offered to customers. Banks were asked to fix service charges having regard to the cost of rendering the services. Banks were also advised to ensure that the charges are reasonable and not out of line with the average cost of providing these services. Banks should also take care to ensure that customers with low volume of activities are not penalized.
According to RBI, the currency chest holding banks have been allowed to levy service charge of Rs. 2 per packet of 100 pieces in cash deposited with their currency chest by non-currency chest branches. Banks have also been advised to put in place a transparent policy in this regard with the approval of their respective boards.

This information was given by the Minister of State for Finance, Shri Namo Narain Meena in written reply to a question raised in Rajya Sabha.

Mobile Number Portability Service to be Launched tomorrow Shri Kapil Sibal to Inaugurate the Service in Rohtak, Haryana

The much awaited Mobile Number Portability (MNP) service will be launched tomorrow in Rohtak, Haryana. The Union Minister of Communications & IT Shri Kapil Sibal with Shri Bhupinder Singh Hooda, Chief Minister of Haryana as the Chief Guest will inaugurate the service at a function in Rohtak at 3 p.m. on 25.11.2010.

A plan for phased migration of networks in all the remaining 22 (excluding Haryana) Licensed Service Areas in the country for working in MNP scenario is being chalked out in consultation with service providers. The detailed program for the entire country will be announced separately.

From tomorrow, mobile phone customers in Haryana Licensed Service Area (LSA) will have the choice of selecting their telecom service provider (operator) with out changing their number, provided a minimum period of 90 days has elapsed after subscription to the mobile service of the current service provider. For change of service provider i.e. porting, a subscriber has to send an SMS (PORTMobile Number) from the number he wishes to be ported, to number 1900 whereby a Unique Porting Code (UPC) will be received on SMS from his current service provider. The subscriber will need to apply in the prescribed application form to the chosen new service provider quoting the UPC which will act as a reference while filling up the application form with new service provider.