India adds prepaids to ATMs in outreach to the unbanked

Dec. 20, 2012

The Indian government has made it a priority to bank the unbanked and they're using every means at their disposal to do it. Earlier this year, the government launched an ambitious program to extend ATM availability to Indians nationwide. Now it's added yet another strategem to the campaign — prepaid cards.

All Indian citizens who have registered for India's biometrics-based unique identity program, Aadhaar, will also be eligible for a prepaid card issued by one of five national banks participating in the new Saral Money program, an article by Future Gov said.

Saral Money will allow the government to transfer social welfare benefits directly to the holder of a prepaid card. This card can then be used to obtain cash, make purchases from merchants that accept Visa and MasterCard, pay bills, and transfer money.

The participating banks will use "micro-ATMs" — handheld devices equipped with a biometric fingerprint reader to verify the cardholder's identity in order to disburse cash. The micro-readers will be distributed to banking correspondents throughout the country, particularly in rural and impoverished areas.

Initially, Saral Money will be introduced in the National Capital Region of India. By the end of 2013, it will be available in all Indian states, the article said.

For more on this topic, visit the regulatory issues research center.

Topics: Asia, Australia & Pacific , Prepaid / Stored Value / Gift Card , Regulatory Issues , Trends / Statistics , Underbanked / Unbanked

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