Aadhaar Payment Bridge System recognized as Premier Choice for Direct Benefit Transfers
The advancement of the Aadhaar-based Payment System (ABPS) has been thoroughly assessed, and the mixed wage payment approach involving both NACH and ABPS routes has been extended until December 31, 2023, or until further notice. The Ministry has explicitly instructed all states that workers seeking employment should be encouraged to provide their Aadhaar numbers, but their work should not be denied solely on this basis.
It has been brought to the attention of the Central Government that frequent changes in a beneficiary’s bank account number, coupled with the failure of the Concerned Programme Officer to update the new account number in a timely manner, have resulted in the rejection of numerous wage payment transactions by destination bank branches (due to outdated account numbers). After extensive consultations with various stakeholders, it has been determined that the Aadhaar Payments Bridge System (APBS) represents the most reliable route for conducting wage payments through the Direct Benefit Transfer (DBT) mechanism. This move aims to ensure timely wage disbursement to beneficiaries.
Once Aadhaar information is updated in the scheme database, beneficiaries will not be required to update their account numbers due to changes in location or bank account details. Money will be automatically transferred to the account linked with the Aadhaar number. In the rare event that a beneficiary has more than one account, they can select the preferred account for payment.
Data from the National Payments Corporation of India (NPCI) indicates a remarkable success rate of 99.55% or higher when Aadhaar is used for DBT, compared to about 98% success with account-based payments. APBS is not only facilitating prompt payments to genuine beneficiaries but is also playing a crucial role in eliminating corruption by identifying and removing fake beneficiaries. The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) has adopted the Aadhaar-Based Payment Bridge System instead of Aadhaar-enabled payment.
The use of the Aadhaar-based Payment System (ABPS) has been evaluated, and the mixed wage payment approach involving both NACH and ABPS routes has been extended until December 31, 2023, or until further notice. The Ministry has clarified to all states that workers who come for employment should be encouraged to provide their Aadhaar numbers but should not be denied work solely on this basis. The eligibility for APBS does not affect a worker’s job card status if they do not request employment.
Under the Mahatma Gandhi National Rural Employment Guarantee Scheme (NREGS), APBS has been in operation since 2017. With the widespread availability of Aadhaar numbers among the adult population, the Government of India has decided to extend APBS to beneficiaries under the scheme. Payments will now exclusively be made through APBS-linked accounts, ensuring a safer and faster payment transfer process.
Out of a total of 14.33 crore active beneficiaries, 13.97 crore Aadhaar numbers have been linked. Of these linked Aadhaar numbers, 13.34 crore have been authenticated, rendering 81.89% of active workers eligible for APBS. In July 2023, approximately 88.51% of wage payments were processed through APBS.
The Mahatma Gandhi NREGA is a demand-driven scheme subject to various economic factors. An appropriate ecosystem is already in place for APBS, and considering the benefits it offers to beneficiaries, it is the most suitable payment system to be employed.
The Aadhaar-based payment system serves as the conduit through which payments are credited to beneficiaries’ accounts. The system follows well-defined steps, with clearly defined roles for beneficiaries, field functionaries, and all other stakeholders.
