“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.


Marrying into the “banking fold”: Aadhaar, the Euro-chip, and the articulation of variant technologies of trust

More today on the use of Aadhaar to produce “financial inclusion” on the margin. I should note at the outset that the point cannot be only to (re) produce a critique of either financial “exclusion” or “inclusion.”

Proto Indo-European technology

Such critique is obviously important but perhaps difficult to sustain too quickly. In anthropology the broader debate may be to place the powerful critique of poverty capital in relation to the production of an unexpected “neoliberal social.” Barring a change in government, a radical curtailment of UID seems unlikely. UID/Aadhaar will continue to be rolled out.  Barring radical and perceptible failure of the program and its effective politicization, certainly possible, the card and number will attach themselves to the administration of more and more entitlements and institutions. The varied effects of UID will be assessed by many agencies and auditors, including (far down the queue) this researcher. Perhaps more than the current situation, of myriad arguably inflated promises of UID’s biometric design and regulation and myriad arguably premature critiques, the emerging field of audit will be critical to engage: what will constitute an event? An effect?

In anticipation of that work, the blog can only aid in the imagination of a research program and its own forms, sites, and constellations of evidence. Blah blah blah.

Today’s text is again from The Hindu, the edition of August 4, and an article posted from Hyderabad. At stake are security technologies for mobile card-based credit, the widespread European chip technology, or EMV [familiar to North Americans who find that their apparently backward and chipless credit cards often fail them in Europe], versus the biometric guarantee of Universal ID and the Aadhaar card. The first is seen as more secure and a proven technology; the second is much more affordable and would lead to the growth of poverty capital through financial inclusion, and with it the “social” promise of presumptively widespread microcredit.The solution may somehow be to “marry” security and inclusion in the production of a new form of trust-bearing identity and thus to bring in the poor to the formal sector financial “fold” while calming concerns about the trustworthiness of the new technology, its bureaucracy, and its economically marginal beneficiaries. This marriage of techniques and forms would somehow copy the effectiveness of the Euro-chip but bypass its prohibitive cost as banking’s potential seems to lie in producing cheaper norms of inclusion.

Choice is between EMV and Aadhaar: RBI Governor

While the chip and pin is a tested technology, Aadhaar based option is cheaper, says D. Subba Rao

Reserve Bank of India Governor D. Subba Rao has underlined the need for taking a decision on the choice between migrating to EMV (Europay-MasterCard-Visa) with chip and pin and an Aadhaar-based biometric authentication.

The chip and pin is an established and tested technology, but is relatively expensive. The Aadhaar based option is cheaper, but the robustness of the technology is as yet unproven. “If indeed we are finally able to marry Aadhaar into the cards, we will be achieving same level of security available in chip and pin model at a much lower cost,” he said.

Dr. Subba Rao was speaking on the topic “Indian Payment and Settlement Systems: Responsible Innovation and Regulation” at the Institute for Development and Research in Banking Technologies here on Friday. Aadhaar was recognised as an alternate authentication mechanism in payment systems and Aadhaar based payment products had already been designed and introduced.

Aadhaar Enabled Payment Systems was aligned with the UIDAI’s plan to utilise the UID number for routing all the Government benefit transfer payments to beneficiaries. AEPS was a bank-led model allowing online transaction through the business correspondent of the respective bank using the Aadhaar identification.

He said the Aadhaar Payment Bridge System was a centralised electronic benefit transfer facilitating disbursement of benefits to the bank accounts of the beneficiaries linked to their Aadhaar numbers. Such transfer would enable secure and efficient disbursal of benefits to intended beneficiaries which, in turn, help in reducing the administrative costs as well as leakages for the government.

This will also further financial inclusion by bringing the beneficiary households into the banking fold,” he said.

Will this Indo-European marriage make it?

For now, one notes the general form of the proposition: that as banking comes to drive Aadhaar, a form that had earlier if still recently migrated away from a territorialized, village or family-based defense model to a more deterritorialized and neoliberal form tied to a vision of rationalized population mobility and wealth creation, norms of “international” (here European) standard security must somehow be reintroduced. Aadhaar is to be “married” to a more secure technology and form, something like the chip and PIN number bank card but without the cost of the chip. What kind of marriage will be arranged is not yet clear. But if Aadhaar, under the ministry of finance, is perceived by security-focused industries and bureacracies as lacking in security, the idea here is that Aadhaar/UID must be combined with something else, not yet specified by these high-level officials.

Aadhaar and “Financial Inclusion” on the doorstep: Biometrics and the double expansion of poverty capital

A news item this week promises new “financial inclusion” of those previously too poor to be eligible for formal savings and credit instruments in the legal banking industry.

Intensified bank recruiting for “no frills” accounts

Reporting from the Union Territory of Puducherry [the former Pondicherry], the August 5 edition of the Hindu notes:

The State Level Bankers’ Committee (SLBC) has decided to step up campaign to lure people for opening bank accounts.

A meeting of SLBC, which held here recently, reviewed the progress of financial inclusion in the Union Territory.

A release said, the bankers were asked to give priority to those approaching banks for opening new accounts. The services of existing customers could be used for reaching out to others.

Simplification of norms

The norms for opening accounts were also simplified. They could open accounts with zero balance or low balance. Those, who had bank accounts, had been asked to hand over copies of ration card and “Aadhaar” card for including the details in their respective accounts immediately.

At the outset, some critics would understandably challenge the degree of inclusiveness of such publicity of inclusion. Thus Usha Ramanathan, whose article in Seminar I discussed in the previous blog post, compellingly challenges multiple “myths” promoted by the UIDAI and its boosters, including “the myth that this will be inclusive.” The enrollment structure of UID and Aadhaar formally parallels the typical enrollment structure of formal sector banking: one can only open a bank account, in many cases, through an introducer known to the bank, that is another account-holder. One’s access to banking presumes one maintains ties to others with the status of bank account-holders. Similarly, one registers for Aadhaar primarily in one of two ways: with sufficient formal documentation or, in the absence for many of the same [cf. the return of Jim Crow legislation in the ever more ugly United States] through an introducer.

Ramanathan does not in this short piece attend to the role of NGOs as introducers, discussed in the blog earlier in the context of debates over transgender inclusion under Aadhaar. But even if NGOs provide a different avenue of inclusion for variously marginal populations, they do so precisely through specific categories of humanitarian legibility producing their own terrain of limit and abandonment. One could both limit and extend her argument in reference to NGO “introducing.”

But here I want to support a claim opposite to that of Ramanathan, though not critical of or excluding her point. That is, how does inclusion itself become a ground of operations that might merit closer critical attention. The idea of inclusion as a form of subjectivization is not particularly novel, of course.  But it takes on a new range of relevance given the recent and ongoing powerful analysis of poverty capital and humanitarian goods by scholars like Ananya Roy, Vincanne Adams, Peter Redfield, and others. I had a recent and exciting conversation with William Stafford whose work rethinking the informality and extralegality of informal labor also engages the multiple ways in which “the poor” are being produced as forms of “potential value” and thus value.

At the outset, let me just note the following points, juxtaposing the brief Puducherri report with the photo above, referring to a different recent effort to include the previously excluded within formal sector banking through new “doorstep” enrollment programs linking humanitarian NGOs, corporate banks, and the state, a version of the expected current triumvirate.

(1) The expansion of banking to the poor, and thus of banking through the poor, operates in relation to Aadhaar in a double form, at least in reference to the limitations of the brief article. That is: new norms of simplified enrollment are to be offered as an inclusive measure. These norms parallel the design and rhetoric of UID/Aadhaar though the article does not state if Aadhaar will be used as a necessary or sufficient guarantor of the trustworthiness of the newly included marginal subject of finance. Given multiple previous articles splayed across the mediascape in which part of the promise of Aadhaar is its guarantee of financial inclusion, the use of Aadhaar in such new norms may be implied. But what is explicitly noted is something else, not that Aadhaar will be used to bring the marginal and excluded into the embrace of the included, but rather than Aadhaar will be demanded of the marginal and included: “Those, who had bank accounts, had been asked to hand over copies of ration card and ‘Aadhaar’ card for including the details in their respective accounts immediately.” In other words, not only is banking expanding in the sense of creating value through inclusion, given apparent recalibrations of trustworthiness through biometrics, but banking is expanding in the sense of creating value through intensifying its informational access to the already included by demanding of them new biometric links to their basic information. I will term this the double expansion, of persons included within the embrace of formal finance capital and of persons included within the economy of “basic information.”

(2) I lack as of yet adequate details of the “doorstep banking” programs that the photograph records. Of note is that this photo, part of a microfinance NGO’s self-audit and promotional materials, includes as obvious and necessary to the scene an act of biometric registration: a woman is having her fingerprints electronically taken through a mobile device “at the doorstep.” In a conversation we had at a conference at Berkeley organized by my colleagues Ananya Roy and Raka Ray, Ravi Sundaram of the Center for the Study of Developing Societies and Sarai pointed out that people’s lives are being saturated by a plethora of biometric demands, not only by UIDAI for the Aadhaar card. Here we have a microcredit program whose promise of total inclusion (“at the doorstep”) involves apparently parallel biometrics. From “a million mutinies now,” we seem to have slid into the age of a million biometrics. What remains in question, for me, is how this multiplicity of tracing will stand in relation to UID’s promise, or if you like threat, of universal de-duplication.