IndiaStack will provide a unified platform for electronic verification
Under the Digital India initiative, the government aims to provide seamless digital connectivity, and paperless and cashless service. At present, an individual can use Aadhaar, digital signatures and know-your-customer (KYC) documents to prove her identity and conduct financial transactions. The government wants to go further and link these different identity proofs. Software think-tank iSpirt has developed an initiative, IndiaStack, which is a system built on the infrastructure of Jan Dhan Yojana, Aadhaar and mobile telephony. Its aim is to increase financial inclusion by collating data from these initiatives. IndiaStack has five programmes: Aadhaar, e-KYC, e-signature, digital locker and a unified payments interface (UPI). Financial services companies, including financial technology (fintech) firms, can use this platform to access information about customers. Here’s a look at the facilities.
Aadhaar: A 12-digit unique identity number issued to residents of India by the Unique Identification Authority of India (UIDAI), a central government agency. Aadhaar collects your biometric data, which is then used to identify you.
e-KYC: This runs on the Aadhaar database. Fulfilling the KYC process is mandatory for many financial transactions such as opening a bank account or investing in a mutual fund. Earlier, one had to provide physical proofs of address and identity, but e-KYC eliminates the need to provide hard copies. You can allow UIDAI to share your Aadhaar data electronically.
e-Signature: Signatures are a secure way of authenticating transactions. When wet signatures are used, you either have to sign in person or you have to physically transport the document with your signature. Electronic signatures allow you to digitally sign a document. This is based on Aadhaar and e-KYC services.
Digital locker: Here you can save, get and share any documents in electronic and printable formats. This digital repository eliminates the need for maintaining hard copies of documents like certificates, and provides secure and consented access to them. For instance, when you go to a bank seeking a loan, you can simply share documents like the Permanent Account Number (PAN) and address proof from the digital locker, instead of carrying their attested hard copied.
UPI: This is a payment system that allows you to send money from your bank account the way you send an SMS or email. Built on the immediate payment service (IMPS) platform, UPI allows you to send money from one bank account to another in real time and it is available 24×7. It needs just one virtual ID for authentication and does not disclose your bank account details to the recipient.
What does this mean?
Under the Digital India initiative, the government has mandated an open application programming interface (API) policy for these five programmes. This means that data from these five inter-linked programmes will be available to users. However, at all times you will be the custodian of your data. No user can access your information without your consent.