“1.2 billion credit histories will be available”: Aadhaar and the reformation of the Masses

This is the final post for now introducing the question of financial inclusion. Barring some exciting new topic brought by next week’s events, I would like to turn back to the northeastern states of India and to the question of the migrant in coming days, and then to a close reading of Imagining India, the book by UID head Nandan Nilekani..

Frequent news image: the new account-holder

So, briefly: an earlier article from the Hindu subsidiary Business Line, filed from Chennai, on 5 November 2011, by A. J. Vinayak and M. V. S. Santosh Kumar:

‘Aadhaar’ the unique identification number, will be aadhaar (support) to banks in not just one but three ways. Not only would it reduce the customer acquisition cost (estimated at Rs 150 an account), it would also reduce customer distribution costs and provide banks credible information for credit risk analysis in the years to come.

Participating in a panel discussion on ‘Profitable models for financial inclusion, agriculture and rural development’, Mr Rajesh Bansal, Assistant Director-General of Unique Identification Authority of India, said that by 2017, nearly 1.2 billion people in the country would be enrolled under Aadhaar.

As Aadhaar gives enrollers a choice to open bank accounts, Indian banks will have access to 1.2 billion customers in the country by the end of 2017, Mr Bansal noted. With this, 1.2 billion credit histories will be available which will in turn help banks to do better credit risk analysis, he said.

Stating that 11 crore people have already enrolled under Aadhaar, he said 3 crore people are being enrolled under the project every month. Around Rs 3-lakh crore of subsidy transfer opportunity is waiting to be unlocked post-Aadhaar, which dwarfs the Rs 22,000 crore currently being spent under National Rural Employment Guarantee Act (NREGA).

Since 1.2 billion people are expected to get the benefit of Aadhaar in the country, this will be a good KYC (know your customer) for bankers.

Post this panel discussion, Dr Subir Gokarn, Deputy Governor, in his speech, also noted the immense opportunity the ‘financially excluded’ offer.

According to a National Council for Applied Economic Research survey, around 42 per cent of the rural household’s have financial assets in the form of cash. The same proportion in urban areas is 23.4 per cent. This data, despite being dated (survey was done in 2005), would be of similar proportion even today, he opined.

While he used the reference of ‘know your customer’ transition to ‘grow with your customer’ strategy going forward for banks. It is very relevant in case of financial inclusion given largely untapped financial savings and other financial products.

So just a single point. Various state and bank officials promote UID/Aadhaar as an immense resource, a promise, a potential, a source of untapped wealth in the very form of the masses, the long-suffering material of Planned Development, its scary enumeration once a sign of biological catastrophe and the need for swift surgical reform. But here the mass in its enumeration is the source of previously disregarded wealth newly available through the technology of biometrically guaranteed identification. Wealth where before there was waste, a but like the Appalachian landscapes newly given over to the promise of fracking in North America.

Again, it is not simply that Aadhaar creates potential through the registration and formal sector control of previously untapped monetary reserves: but that Aadhaar creates a powerful new information reserve, 1.2 billion credit histories, a double expansion. The mass is reformed both as a source of minimal wealth that in its very massiveness will generate untold potential, and as a source of the radical expansion of information enabling new massifications of risk (sorry!), new control points enabling the presumptively effective management of the risk as poverty becomes the primary national resource for wealth, its marginality a resource for reframing the object of risk (“Know Your Customer”) itself.

Is this a problem? I’m not sure. Win-win situation? I’m not sure.

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One thought on ““1.2 billion credit histories will be available”: Aadhaar and the reformation of the Masses

  1. Reaching for Aakash ?

    Yes , Mr Prime Minister

    You can deliver on your promises , by distributing Aakash2 tablets ( being developed by IIT- Bombay ) to 20 Crore Indians who have registered for Aadhar Identification so far
    In your Independence Day speech , you made following promises – all of which can come true by employing latest software / apps , specified by IIT-B

    Before distributing Aakash2 to 20 Crore Aadhar Card-Holders , just ensure that these tablets are integrated / pre-installed with :

     “ Aadhar Identification Number “ of Nandan Nilekani

    To fulfill your promise :

    “ It will be our endeavour to ensure that all households benefit from bank accounts in the next 2 years. “

     “ Mobile Wallet “ app of Sam Pitroda

    To fulfill your promise :

    “ We want to create a system in which money from Government schemes – pension for old people, scholarship for students and wages for labourers – can be credited directly into people’s bank accounts. This would reduce inconvenience to the beneficiaries, make it easy for them to receive payment and increase transparency. For this work, we will take help from the Aadhar scheme under which about 20 crore people have been registered so far. “

     “ Educational Apps “ of Kapil Sibal ( installed on Aakash2 )

    To fulfill your promise :

    “ Now we will focus on improving the quality of education. In the next few months we will put in place a system of continuous assessment of the benefit our children are getting from teaching.
    We want to create many new job opportunities for our youth in the coming years. To achieve this it is necessary that we train them in skills which our economy needs. It is our endeavour to put in place a system in which training facilities are available in many new skills.

     “ My Jobs “ app [ freely downloadable from Google Play ]

    To fulfill your promise :

    “ I promise that we will work hard for creation of new employment opportunities for our young men and women living in villages and cities “

    Mr Prime Minister ,

    You have less than 18 months to fulfill your promises before 2014 National Elections

    There is no time to waste !

    And the best part is :

    No need to pass a bill in the Parliament . No need to worry about “ Coalition Dharma “ !

    With regards

    hemen parekh

    Jobs for All = Peace on Earth

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