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Before the onset of the COVID-19 pandemic, our TV screens were swarmed by a relentless advertising spree selling the myriad benefits that came with acquiring an Aadhaar card. They showed displayed how doors would magically open as soon as the protagonists of these commercial dramas flashed their Aadhar cards, enabling them to catch flights to save dying fathers or ensuring that they never go hungry again. These commercials sold Aadhaar – essentially an identity card – as an instant panacea to life’s most difficult problems. Some went several steps further and portrayed Aadhaar as having the power to bestow upon the poor a self-respecting identity.
Aadhaar’s miraculous ability to provide succour was seriously tested during the COVID-induced economic hardships and the multitude of deprivations that got magnified in its wake: lack of food, cash, shelter, access to basic healthcare for migrant workers, daily wagers, informal workers in cities and among many other sections of the population.
Both before and during the pandemic, there is sufficient evidence to show that one’s Aadhaar number is imbued with strange properties; not having one results in an increasing number of benefits being denied as the range of services requiring mandatory Aadhaar linkage expands steadily. However, having an Aadhaar number does not guarantee access to the benefits that citizens are legitimately entitled to. For a summary of Aadhaar-based exclusions, look here, here and here.
In other words, Aadhaar is not the magic wand that it was projected to be.
It can be argued that the creators of the Aadhaar ad campaign, despite being officially vetted and approved, went overboard and made exaggerated claims about the powers of the universal ID; powers that couldn’t possibly be realised. It would more reasonable to expect Aadhaar to work in more tractable and realistic scenarios; for example, as a valid proof of identity to open a bank account.
Sarita helps my household with domestic work. In 2019, she was approached by a friend to contribute a monthly amount to a chit fund, an informal savings network with a promise of one jackpot lottery prize each month to a randomly chosen member of the group, over and above their individual savings which would multiply at the end of the year. This was very alluring and I had a tough time persuading her to stay away, but this seemed too good to be true; there were no transparent accounts, no accountability and no security for her hard-earned money.
I finally got her to agree to put the same amount of money in a recurring deposit (RD) in her name, where her money would be safe and could even multiply, depending on interest rates.
We agreed that it would be easiest if I transferred part of her salary to this RD directly so that she would not be burdened with the additional task of making the monthly payment. I took her to the HDFC bank branch in which I have an account and asked them to initiate an RD in her name to which I could contribute each month via direct debit.
Sarita is originally from a poor tribal part of Jharkhand. Having lived in Delhi for several years, she has a voter ID card, an Aadhaar card and even a PAN card, despite being way below the lowest tax bracket. Since she was fully armed with all manner of identification, was literate enough to sign her name and already had a bank account in another bank, we marched to the HDFC branch confident that it would be quick trip.
The bank staff’s immediate response was: “Not possible, madam.”
“Why not?” I asked.
“You can’t transfer money to her RD. Only she can, from her own savings account.”
“So open a savings account in her own name,” I said. This led to a prompt, second: “Not possible, madam.”
They asked if she had a savings account in any other bank. As it happens, she did, in another part of the city where she lived previously. The bank staff insisted that she had to open the RD account there. I couldn’t understand why. When I could have multiple accounts, why couldn’t she open a new one?
The bank employee hemmed and hawed. I was incredulous. Someone with all the requisite documents can’t open a new account? This must be shared on social media, I thought. “Could you please give this to me in writing?”
My request was met with hectic, whispered consultations. Suddenly, miraculously, opening the account became possible. The person handling my query mentioned that a zero balance account could be opened, which could then be linked to an RD. I again asked for a regular savings account, but that was firmly turned down, with no specific reason offered.
The forms started to be filled and we encountered the compulsory question about Sarita’s mother’s name. I was pleasantly surprised to see that names of both parents were mandatory, however, in this case, it turned out to be a problem. Sarita’s mother had died during childbirth and she had no memory of her mother being referred to by her first name ever.
Relief immediately coloured the faces of the bank’s staff who triumphantly declared that her account could not be opened without mother’s name. It is impossible for anyone to not know their mother’s name!
I tried to reason with them by saying that she was born in a tiny village in Jharkhand; she had never even seen her mother. She knew her father’s and husband’s names; could an exception not be made? But nobody budged. The person who was filling out her form put the pen down, leaned back and smugly said “I am not signing this form without her mother’s name”.
I persisted. She had managed to get a voter ID, Aadhar card and a PAN card; critical documents for citizenship in India, all without knowing her mother’s name and you won’t open a bank account?
With a big victorious, end-of-the-matter smile he said, “No madam.”
“This, too, must be shared on social media,” I said as I got up to leave. They started looking worried. As I was arguing with the staff, Sarita desperately called her sister who knew their mother’s name. Phew!
Finally, all the paperwork was done and her zero-balance account was opened. I set up a direct debit to her account and her RD was started.
What we thought would be a quick-and-easy 30-minute visit ended up being an over-one-hour-long tiring dispute.
Cut to 2021.
The RD can only run for one year at a time, after which it needs to be renewed. Due to the pandemic, we had delayed physically going to the bank. The amount at maturity had been credited to her zero-balance account and my monthly transfers were continuing, which, in the absence of the RD, were accumulating in her account.
Six weeks ago, we went to the bank. The person at the desk gasped when he saw the balance and told us that she was lucky that the account hadn’t been closed down on account of the suspiciously large sum. I laughed, at first, because her account balance, while certainly larger than zero, was not large in an absolute, middle-class sense.
The bank employee informed us that when the amounts in these zero-balance accounts cross Rs 1 lakh, they tend to be scrutinised and frozen on the belief that some rich person is using it to launder black money. I managed to restrain myself from getting into an argument and pointing out the fallacy of this system.
He turned to me and asked: “Why did you not open a regular savings account for her?” Why not, indeed!
I sighed and gave him a short summary of the events of 2019. He said that he would close the zero-balance account, open a regular savings account, transfer her balance to the new account, get another RD started and give her a new debit card and cheque book for the new account. All of this, he said, should take a week to 10 days, which sounded reasonable enough.
Very relieved to have met a kind, efficient and empathetic soul, we went home with our belief in the intrinsic goodness of humanity restored.
Never count your chickens before they hatch. This first, sweet encounter ballooned into an exhausting, six-week saga consisting of four visits to the branch, two visits by the bank staff to my house, numerous calls and WhatsApp messages, the filling out of multiple forms, getting various IDs checked, repeatedly and, needless to say, several arguments.
This morning, the saga (hopefully) ended, but not without a few last-minute hiccups. To get a debit card, Sarita had to undergo ABBA (Aadhar-based biometric authentication). Her fingertips are scarred from manual work. Her index finger and thumb prints could not get authenticated despite repeated attempts; a story that is all too familiar from the accounts of Jean Dreze, Reetika Khera and others from deep within rural India.
And here we were, in posh South Delhi, about to be denied a debit card because ABBA was not working. I insisted that the bank staff try each of Sarita’s 10 fingers until one of them worked. They were as tired of arguing with me as I was with them, so they reluctantly agreed. Finally, after several tries, her least scarred finger worked. Sighs of relief were heard all around.
As we turned to leave the bank, the staff casually mentioned that Sarita would be charged Rs 900 per year for the debit card. I pointed out that I get a free card, to which the response was, “You are premium customer, Madam”. As a person who can easily afford (several multiples of) Rs 900, I get a free card, whereas the likes of Sarita, for whom this is not a trivial sum, has to shell out this fat fee.
I, once again, asked for this policy to be given to be given to me in writing. And, once again, as soon as I said that, it transpired that the bank did, indeed, issue a debit card for Rs 150 per year, which while not free, was much more affordable. We settled for that and came home.
This was our personal saga, located as we are in New Delhi, with all ID cards in place and with Sarita having me as a guarantor. In other words, this was what we had to go through despite enjoying far greater privilege than that of a typical citizen of India. What must be the fate of those who have much less?
While financial inclusion is an attractive slogan and, indeed, is urgently needed for those outside the ambit of the formal financial system, the slogan needs to be translated into reality. We seem to forget the basic fact that financial inclusion means people, who would otherwise not be included, must be included.
This implies that ground staff need to be sensitised and trained in order to make the process smooth and easy, not harder than it needs to be. If the formal banking system is going to make potential customers jump through so many hoops, – many of which are completely unnecessary – it is pushing them into the willing arms of moneylenders, touts and fraudsters.
Finally, as has been argued repeatedly, it is time to recognise the limitations of ABBA and to acknowledge that a failure of ABBA should not be the basis of the denial of benefits. Why is one official government ID not sufficient as identity and address proof? Biometric authentication is not fool proof and is more likely to fail for those who might have no other means of access or redress. This has been proved time and again.
As we were returning home, Sarita remarked to me “Didi, ameer log bank ko dhoka dekar karodon rupaye lekar kaise bhaag jaate hain? Kya bank waale unse kagaz aur aadhaar card nahi maangte?” (How is it that the rich are able to defraud the bank of crores of rupees? Doesn’t the bank staff ask for their documents and Aadhaar cards?). I had no answer.
Postscript: I recently shifted house. We assumed that with all our data digitised, a change of address on official documents would be a quick online request; a piece of cake. However, all institutions asked for the Aadhaar card with the new address. But this was a Catch-22 situation as the process to change the address on an Aadhaar card required another document with the new address! Finally, after many hits and misses, including the great difficulty in accessing the exact form needed for the address change, a kind gazetted officer came to the new house, met all members of the household, certified that our request was genuine and we got our new Aadhaar cards.
Ashwini Deshpande is a professor of economics and director of Centre for Economic Data and Analysis at Ashoka University.