Context:
10 years of PM Jan Dhan Yojana
Aadhaar Enabled Payment System (AePS):
- A bank-led model that allows online financial transactions at Point-of-Sale (PoS) and Micro ATMs through the business correspondent of any bank using Aadhaar authentication.
- Managed by – National Payments Corporation of India (NPCI).
- Key Features –
- Interoperability – AePS allows customers to access their Aadhaar-linked bank accounts through any bank’s business correspondent.
- Authentication – Transactions are authenticated using the customer’s Aadhaar number and biometric data (fingerprint).
- No Need for Bank Details – Eliminates the need for OTPs, bank account details, and other financial information.
- Only the bank name, Aadhaar number, and fingerprint are required.
- Services Offered –
- Balance Enquiry
- Cash Withdrawal
- Cash Deposit
- Aadhaar to Aadhaar Fund Transfer
- Benefits –
- Financial Inclusion – Facilitates access to banking services for rural and marginalized communities.
- Direct Benefit Transfer (DBT) – Enables direct transfer of subsidies and benefits to beneficiaries’ bank accounts.
- Convenience – Simplifies transactions for users without the need for physical bank visits.
- Security – Uses biometric authentication, reducing the risk of fraud.
Source: The Indian Express
Previous Year Question
Consider the following statements:
1. Aadhaar metadata cannot be stored for more than three months.
2. State cannot enter into any contract with private corporations for sharing of Aadhar data.
3. Aadhaar is mandatory for obtaining insurance products.
4. Aadhar is mandatory for getting benefits funded out of the Consolidated fund of India.
Which of the statements given above is/are correct?
[UPSC Civil Service Exam – 2020 Prelims]
(a) 1 and 4 only
(b) 2 and 4 only
(c) 3 only
(d) 1, 2 and 3 only
Answer: (b)
Explanation:
Statement 1 is not correct: A Constitution Bench of the Supreme Court ruled that the Aadhaar metadata cannot be stored beyond six months.
Statement 3 is not correct: In the 2018 judgement, the Supreme Court held that Aadhar is not mandatory to purchase the insurance products, however, it can be voluntarily used for KYC of the insurance products.
