New Delhi: Dr Saurabh Garg, CEO, Unique Identification Authority of India (UIDAI) today said that the pandemic illustrated the impact that digital payments, which is one of the aspects of digitisation, has had in the country.
Addressing the Plenary Session on Digitisation of Financial Assets for diversification and broadening of investors at the FICCI’s 18th Annual Capital Markets Conference, ‘CAPAM 2021- Beyond India @75: Accelerating Growth through Capital Market, Dr Garg said, “In 2021, we had 392 crore transactions over AEPS (Aadhaar Enabled Payment System), which is a 66 per cent rise from 2019-20 when we had 236 crore transactions. One can very well imagine the impact that digitisation has had and the benefits it has given to people who could do transactions on AEPS run by the NPCI (National Payments Corporation of India) and backed by the Aadhaar system.”
Elaborating further, Dr Garg said, “While Aadhaar started off as an ID, it has helped in empowering people. It has helped in entitlement-based delivery of services and has also transformed the way in which government schemes are being implemented. We can now think of direct cash transfers and direct benefit transfers, which, perhaps, could not have been conceived even a decade back.”
Over the past four- five years, leakages plugged in just five government schemes is around 1.8 lakh crores alone. That is the kind of savings that DBT mechanism based on Aadhaar has had.
On way forward, Dr Garg said that the ability of Aadhaar to provide an inclusive and verifiable KYC, which is essential for the financial sector, is really where the benefits would come. “In the banking sector, approximately 120 crore bank accounts are already linked with Aadhaar and that explains the growth of the Aadhaar payment bridge and the AEPS,” he said.
Dr Garg further said that a PAM, in lines of the JAM, is needed for insurance and pension products “Given the near universal penetration of Aadhaar and of mobile phones to a great extent, the combination of two is where the investment side, the pension side, and the insurance side can work,” he added.
Over time Aadhaar has become nationally acceptable and is verifiable any time anywhere. The JAM Trinity now has more than 300 schemes that uses Aadhaar. There were 773 crore transactions on different schemes in the last year. Capacity wise four crore authentications are happening daily.
Dr Garg further informed that UIDAI is moving to a private cloud infrastructure to further enhance capacity. “We have the state-of-the-art cyber security that ensures we have multiple years of security for the data that we have. With these digital infrastructures and digital background in place, I am sure moving forward in the way the banking sector has seen the growth of digitalisation, we can expect a lot more from the other three financial areas of investment, insurance, and pension.
Mr Ashish Kumar Chauhan, Managing Director & CEO, BSE said that with the advent of the Jan-Dhan Aadhaar Mobile (JAM) accounts, close to 30 crore accounts were created in one year’s time. This is what brought India into the financial inclusion model.
Mr Chauhan said that the number of people getting included in financial markets is unbelievably large. “As on date, we have 7.5 crore investors, and we keep adding 70,000 people daily on an average. From 01 January 2020 till today, the number of investors has grown by 60 per cent,” he said.
To put this progression into perspective, Mr Chauhan said that BSE had 1 crore investors in the year 2008. By July 2011, it had 2 crore investor accounts, which in January 2016 grew to 3 crores. By August 2018 the number touched 4 crores; May 2020 saw 5 crores, and in January 2021, BSE had 6 crores investor accounts.
Further, Mr Chauhan credited the rise in the number of people in financial markets to mobile trading, the geographical reach of which is large. “We have people from the Lakshadweep, and Andaman & Nicobar Islands investing in mutual funds,” he added.
Elaborating on the spurt in the number of accounts in the last one and half year of COVID, Mr Chauhan said that while the eastern region boasts of 13 per cent of the accounts, the customer account numbers went up by 68 per cent. Similarly, the northern region that accounted for 28 per cent of all accounts, witnessed numbers go up by 67 per cent. Similar trend was seen in the southern region, at 23 per cent, and the western region at 34 per cent, saw an increase by 61 and 25 per cent, respectively.
Mr Chauhan stated that Fintech institutions are coming up in all areas. “Traditional institutions are under tremendous pressure to maintain their business model, that includes stock exchanges. You might see more new exchanges and more depositories coming up. Traditional institutions are also trying to create new regulations to maintain their business models,” he added.
Overall, in the last 27 years of automation and digitisation of Indian markets, we have come a long way, but we still have a longer way to go. India on a regulatory framework basis will have to create more institutions, more competing institutions so that if one closes for a small or a larger period, rest of the ecosystem continues to work, Mr Chauhan said.
Mr Vijay Chandok, Co-chair, FICCI Capital Markets Committee and Managing Director & CEO, ICICI Securities Ltd, said that youngsters of today are very well read they understand schemes, trends, etc. A combination of information about policies and how to use the information to participate in the capital market to make money needs to be provided to them. “This is where research using technology that is packaged and presented to them will work,” he said.
Mr Adhil Shetty, Co-chair, FICCI Fintech Committee and Co-founder and CEO, BankBazaar.com said that technology has a key role to play with access. “Technology essentially ensures that anyone who needs to access digitised assets can do it. In the last 18 months of the pandemic, we have clearly seen that consumers want to do everything digitally.
Mr Varun Sridhar, CEO, Paytm Money said due to digitisation, today there is no difference between a small or a large investor and everyone is treated in the same way. “There are three pillars to that – education, regulation, and right product. It is our role as a fraternity to protect our investors hard-earned money,” he said.
The session was moderated by Mr Deepak Ajwani, Editor, ET Online