UIDAI Simplifies Aadhaar Adoption for State and District Cooperative Banks

byPaytm Editorial TeamAugust 28, 2025
Key Takeaways
  • UIDAI has launched a new Aadhaar-based authentication framework for cooperative banks.
  • The framework simplifies Aadhaar adoption and reduces IT costs by allowing DCCBs to use SCBs’ infrastructure.
  • Over 380 cooperative banks (34 SCBs + 352 DCCBs) will benefit from this initiative.
  • Aadhaar services like biometric eKYC and face authentication will improve customer onboarding.
  • Cooperative banks can now expand Aadhaar-enabled services such as AePS and Aadhaar Payment Bridge.

Source: UIDAI Press Release

The Unique Identification Authority of India (UIDAI) has introduced a new Aadhaar-based authentication framework to strengthen the role of cooperative banks in digital and financial inclusion. This initiative comes as part of the International Year of Cooperatives and aims to simplify Aadhaar adoption for over 380 cooperative banks nationwide.

The framework was developed after extensive consultations with the Ministry of Cooperation, NABARD, NPCI, and cooperative banks. It will cover 34 State Cooperative Banks (SCBs) and 352 District Central Cooperative Banks (DCCBs) across India.

Under the new system, only State Cooperative Banks will be registered with UIDAI as Authentication User Agencies (AUA) and eKYC User Agencies (KUA). The DCCBs will be able to use the Aadhaar authentication application and IT infrastructure of their respective SCBs, eliminating the need to build or maintain separate IT systems. This will reduce costs, simplify processes, and improve efficiency.

With this framework, cooperative banks can offer faster, safer, and more convenient Aadhaar-enabled services, including biometric eKYC and face authentication for seamless account opening. This will particularly benefit rural and semi-urban populations, enabling easier access to banking facilities.

The move also ensures that subsidies and welfare payments can be directly credited into customers’ cooperative bank accounts using Aadhaar. Moreover, cooperative banks will be able to extend services such as the Aadhaar Enabled Payment System (AePS) and the Aadhaar Payment Bridge, thereby boosting digital transactions and strengthening last-mile connectivity.

This framework marks a major step in expanding Aadhaar’s role in financial services and reinforces cooperative banks as a key pillar in India’s banking ecosystem.

Author

Paytm Editorial Team

The Paytm Editorial Team is a collaborative group of writers, editors, and industry experts. We're dedicated to bringing you the latest insights, news, and guides on digital payments, financial services, and the technology that's shaping India's economy. We offer easy-to-follow guides and insights to help you explore Paytm’s products, features, and services. Our goal is to provide clear, reliable, and helpful information to empower you on your financial journey.

FAQs

What is the purpose of the new Aadhaar authentication framework for cooperative banks?

The framework aims to simplify Aadhaar adoption, reduce IT costs, and enable cooperative banks to offer seamless Aadhaar-based services, thereby promoting financial inclusion.

Which cooperative banks are covered under this framework?

The framework covers 34 State Cooperative Banks (SCBs) and 352 District Central Cooperative Banks (DCCBs) across India.

How will DCCBs benefit from this framework?

DCCBs can use their respective SCBs’ Aadhaar authentication infrastructure instead of building separate IT systems, leading to cost savings and smoother operations.

What Aadhaar-enabled services will customers get through cooperative banks?

Customers will get biometric eKYC, face authentication for account opening, direct benefit transfers (DBT), AePS, and Aadhaar Payment Bridge services.

How will this framework help rural and semi-urban populations?

It will make banking access easier by enabling secure Aadhaar-based onboarding and ensuring subsidies and welfare payments are directly credited to cooperative bank accounts.
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