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What are Aadhaar-enabled ATMs and how will they help rural India

To make cash withdrawals easier in remote rural areas, fintech firm Mahagram has decided to deploy more than one lakh Aadhhar-enabled ATMs.

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To make cash withdrawals easier in remote rural areas, fintech firm Mahagram has decided to deploy more than one lakh Aadhhar-enabled ATMs. But what are Aadhaar-enabled ATMs and how are they diferent from the usual ATM machines. 

Aadhaar Enabled Payment System or AEPS is a payment service developed by the National Payments Corporation of India (NPCI) allowing banks, financial institutions to use Aadhaar number and online UIDAI authentication for transactions through their respective Business correspondent service centres.

Business Correspondents are retail agents engaged by banks for providing banking services at locations other than a bank branch/ATM.

besides cash withdrawals, Aadhaar ATMs will also provide eKYC, paperless and instant banking. Citizens in far-flung areas can enjoy services like cash withdrawal, cash deposit, balance enquiry, mini statement, loan repayment, loan disbursement, domestic remittance services, customer enrolment, e-governance, pan card and eKYC of customers. 

Vasudev Phadnis, Director Business Development, Mahagram said the launch of micro ATMs across network will enable every Indian to get the power of digital banking experience.

"At Mahagram we have a vision to create about 500 million transactions by FY 2020. We believe Aadhaar is the only medium to bring the large number of under-banked and unbanked people in the proper banking system. This will also help in generating transactions in areas where banking access is limited," he added.

The Mumbai-based firm - Mahagram focuses on alternate payment technologies that facilitate the banking needs with the help of Aadhaar and digital banking platform. 

Small-sized lender DCB Bank had first started an Aadhaar-based ATM usage facility wherein a customer can transact using his biometric details instead of the PIN.

"We have started the first ATM in the country which operates using the Aadhaar data. One can do a transaction without the card as well," the bank's Managing Director and Chief Executive Murali Natrajan told PTI.

The user can key-in the 12-digit Aadhaar number or swipe the card at an automated teller machine (ATM) to start a transaction, but at the stage of confirming the identity, it requires biometric details rather than the PIN.

(With inputs from PTI)

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