**Policy Summary: RBI/2016-17/170 - Aadhaar-based Authentication for Card Present Transactions**
This circular, issued by the Reserve Bank of India (RBI) on December 2, 2016, addresses the implementation of Aadhaar-based biometric authentication for card-present transactions. It serves as a follow-up to circular DPSS.CO.PD.No.892/02.14.003/2016-17, dated September 29, 2016, which mandated that all new card-present acceptance infrastructure deployed from January 1, 2017, be enabled for processing payments using Aadhaar-based biometric authentication.
Recognizing a slowdown in the deployment rate of acceptance infrastructure due to supply-demand mismatches of Aadhaar-enabled devices, the RBI has extended the deadline for deployment of such devices to June 30, 2017. Banks are still expected to continue with necessary arrangements at the host-end, network level, and in device readiness to ensure adherence to the instructions.
The circular clarifies that the original instructions of September 29, 2016, pertain specifically to the deployment of *new* card acceptance infrastructure. The timeline for enabling *existing* card acceptance infrastructure for Aadhaar-based biometric authentication will be advised separately at a later date.
This directive is issued under Section 10(2) read with Section 18 of the Payment and Settlement Systems Act, 2007 (Act 51 of 2007).
For further information, contact Nanda S. Dave, Chief General Manager, Department of Payment and Settlement Systems, Central Office, 14th Floor, Central Office Building, Shahid Bhagat Singh Road, Fort, Mumbai – 400001. Phone: 91-22-2264 4995; Fax: 91-22-2269 1557; Email: cgmdpsscorbi.org.in.
Key Entities Referenced
Aadhaar: A 12-digit individual identification number issued by the Unique Identification Authority of India.
Scheduled Commercial Banks: A category of banks in India, including RRBs.
Urban Cooperative Banks: A type of cooperative bank in India that operates in urban and semi-urban areas.
State Cooperative Banks: Cooperative banks operating at the state level in India.
District Central Cooperative Banks: Cooperative banks operating at the district level in India.
White Label ATM Operators: Entities that operate ATMs but are not banks.
Payments Banks: A type of bank in India that can accept deposits and provide payment services, but cannot lend.
Small Finance Banks: A type of bank in India focused on providing financial services to underserved populations.
Mumbai, Maharashtra: Financial center of India, location of the RBI central office.
Payment and Settlement Systems Act 2007: An act of the Indian Parliament that provides the legal framework for the regulation and supervision of payment systems in India.
RBI/2016-17/170
DPSS.CO.PD No.1421/02.14.003/2016-17 December 02, 2016
The Chairman and Managing Director / Chief Executive Officers
All Scheduled Commercial Banks including RRBs / Urban Co-operative Banks /
State Co-operative Banks / District Central Co-operative Banks/
Authorised Card Payment Networks / White Label ATM Operators /
Payments Banks / Small Finance Banks
Dear Madam / Sir,
Aadhaar-based Authentication for Card Present Transactions
A reference is invited to our circular DPSS.CO.PD.No.892/02.14.003/2016-17 dated September
29, 2016 wherein banks were advised to ensure that all new card present acceptance
infrastructure deployed with effect from January 1, 2017 are enabled for processing payment
transactions using Aadhaar-based biometric authentication also.
2. It has been brought to our notice that the rate of deployment of acceptance infrastructure has
slowed down owing to the mismatch between demand and supply of such Aadhaar-enabled
devices. Therefore, on a review, it has been decided to extend the time for deployment of
Aadhaar-enabled devices till June 30, 2017. However, banks may continue to make necessary
arrangements, including changes as host-end, network level and device readiness, as required
to ensure adherence to above instructions.
3. Further, it is also clarified that the instructions contained in our circular dated September 29,
2016 are for deployment of new card acceptance infrastructure. As regards enablement of
existing card acceptance infrastructure for processing payment transactions using Aadhaar-
based biometric authentication, the timeline will be advised in due course.
4. This directive is issued under Section 10(2) read with Section 18 of Payment and Settlement
Systems Act 2007 (Act 51 of 2007).
5. Please acknowledge the receipt of this circular.
Yours faithfully,
(Nanda S. Dave)
Chief General Manager
भुगतान और ननपटान प्रणाली निभाग, केंद्रीयकायाालय, 14िीमंनिल, केंद्रीयकायाालयभिन,शहीदभगतसिंहमागा, फोटा, मम्ुबई - 400001
फोनTel: (91-22) 2264 4995; फैक्िं Fax: (91-22) 22691557; ई-मले e-mail : cgmdpssco@rbi.org.in
Department of Payment and Settlement Systems, Central Office, 14th Floor, Central Office Building, ShahidBhagat Singh Road, Fort, Mumbai - 400001
सहदी आिंान ह,ै इिंकाप्रयोगबढाइए