In the recent time the most development has been made in the nrega payment process. With the introduction of eFMS (which works in sync with npci mapper), making payment of MGNREGA wage was breeze. Then there were problem of fund. Our challenge was to “catch” the fund, while fund was released. It was easier to book product of flash sale than catching an FTO fund. Then came NeFMS which solved this signing related problem fully. And now NeFMS enabled for Wage, Skilled/Semi-Skilled, Material, Admin type FTOs, running behind fund has come to an end. If you compare present payment process with the system that was in practice from 2008 to late 2014 the present system seems like butter. Can you remember typing out name, ac numbers, amount in MS Excel and sending those to banks? And the mistakes caused by it? After that a pay order generation module was integrated with NREGA offline software which was good but not full proof. We have to copy paste the data into excel sheets and give them to the bank for feeding it into their system.
Everything WAS fine, everything IS fine, BUT the advent of AADHAAR based payment system is making the whole thing cumbersome. I am not saying that ABP system is good or bad. I have no authority or level to judge such a big system. NREGA is worlds largest scheme in terms of direct benefit transfer. ABP is a piller to that system. So, you can guess the level of research and development that has gone in the conceptualization and development of AADHAAR based payment system (ABPS). Now ABP has made NREGA payment process the less transparent payment system (may be in the world), which was targeted to be the most transparent system in the world. Also, from the Gram Panchayat perspective and from the beneficiary perspective, nrega payment has become a terrifying subject. You can get bank IIN numbers from here.
Today I am going to search the root cause which is making nrega payment a nightmare day by day. What is wrong here? What is causing so large number of ABP transactions to get rejected? Who is responsible? What might be the way out?
All the aspects discussed here is highly technical and supported by official documentation. These are not random thoughts which appear in my dreams.
Before we begin to dig into the cause of the problems we have to know the working of the system. We will discuss the procedure from the beginning to the end. Its a lengthy process. So, I am going to break it in sections. Broadly I am diving the whole procedure into two parts. One part is the PIA part that is we. Another part is the bank part, this involves sponsored banks, beneficiary bank and NPCI. I will discuss the second part first. This will be better for understanding. So, lets begin :
Seeding of AADHAAR number
The whole process begins with the seeding of AADHAAR number into bank’s Core Banking Solutions (CBS) and into the NPCI Mapper. The whole procedure follows below mention steps as specified by NPCI (National Payments Corporation of India):
Seeding of Aadhaar numbers has got two steps
- Verification and updation of Aadhaar number in the core banking
- Seeding the Aadhaar number in NPCI mapper
Banks should take utmost care in seeding the Aadhaar number into an account. Once the Aadhaar number is seeded, then that account shall become eligible to receive Direct Benefit Transfers (DBT) credits from the government. Incorrect mapping will lead to wrong credits. The following steps should be followed by the bank for seeding an Aadhaar number.
1) Under no circumstance the Aadhaar seeding should be done without a written consent of the customer.
2) The following documents should be part of the list of documents to be submitted by the customer for verification. If the documentary proof submitted is not in line with the internal procedures of the bank, then such request for Aadhaar seeding should be rejected with advise to the customer the deficiencies to be rectified.
- Copy of the Aadhaar card
- Written mandate by the customer – format in Annexure II given for seeding Aadhaar number with bank account for LPG. Form for normal seeding is given in annexure III.
- Any other document as may be required by the banks depending on their internal approval process.
3) As a first step of seeding, verification should be done whether the account is eligible to receive the credits pertaining to the direct benefit transfers. If the account is not eligible to receive the credits then the seeding request should be returned to the customer with appropriate reason. Few examples
- NRE account
- Loan account
- PPF account
- Blocked/frozen account
(The list is only indicative. Any account that is not eligible to receive credits should not be seeded with NPCI. Such seeding request should be rejected, with the reason for such rejection)
4) Bank should have distinct fields for updating the Aadhaar number submitted for KYC purpose and Aadhaar for seeding purpose. Under no circumstances the Aadhaar number submitted as a part of KYC be seeded in NPCI mapper. The seeding should only be subject to explicit request from customer for receiving the Aadhaar based payments and also subject to submission of written consent (mandate) by the customer. Based on the purpose for which Aadhaar number is submitted by the customer, the bank official should update the number in the relevant field in core banking. Also banks should implement the verhoeff algorithm for checking the validity of the Aadhaar numbers.
5) Bank should have automated process with a minimum of one time download of all Aadhaar numbers submitted for seeding purpose to be uploaded into NPCI mapper. It is recommended that banks should have process for multiple download and upload processes during a day. The downloaded data should be as per the format specified by NPCI for mapper upload (Annexure IV). After the seeding file is uploaded, the NPCI mapper will provide a response file indicating whether all the records are updated in the mapper or some records are rejected. Banks should have monitoring mechanism to verify the response files received from Aadhaar mapper and take corrective action at their end.
6) There should be a provision in CBS to update the status of seeding in NPCI mapper. If the Aadhaar number is rejected by the mapper during the seeding process, the reason for the reject should be updated in CBS.
7) Bank should send a communication to the customer on seeding of Aadhaar number with seeding date in case of successful seeding. In case of unsuccessful seeding the communication should be sent along with the reason for rejection. It is preferable to send SMS wherever customer has registered his mobile number.
8) The front desk officer/staff should be trained well, to understand that, updating the Aadhaar number in CBS does not mean completion of mapping. Banks should have standard operating procedure to facilitate smooth seeding of Aadhaar numbers. The staff should be given training on all the mapper related matters. The officers/staff should be given a provision to check for seeding status to enable them to answer the customer queries. The officer/staff should be able to communicate to the customer, the reason for rejection as well.
In the event of an account, for Aadhaar number is seeded in NPCI for receiving the benefits becoming ineligible to receive the credits, the bank should take immediate steps to de-seed such an Aadhaar numbers from NPCI mapper. The following are the events that should trigger de-seeding
- Account closed
- Account holder expired
- Customer insolvent/ Account holder became insane
- Account Under Litigation
- Account blocked or frozen
Customer consent is not required for de-seeding Aadhaar numbers in the above cases.
a) Banks should deseed the Aadhaar number once the account becomes ineligible for receiving the credit.
b) In case of an account being frozen or blocked temporarily, the Aadhaar number mapped to the account should be deseeded with a facility to reseed the account in the event of its activation. This process should be automated and there should not be any manual intervention. National Automated Clearing House (NACH) Procedural Guidelines
c) The bank should have standard operating procedure for deseeding the Aadhaar number on the basis of customer request.
d) Once the deseeding process is executed in core banking, batch processing should be initiated at periodic time intervals to download the deseeding files in the format specified by NPCI.
e) Deseeding should be an automated process and carried out at frequent intervals on each day with a minimum of one time at EOD of core banking.
f) There should be a process to monitor the response files received from the mapper to ensure deseeding is completed. If there is any rejection the bank should verify the reason for rejection and take corrective action immediately.
g) The final status of deseeding should be updated in core banking system so that the front desk officer/staff will be able to see the seeding/deseeding status and communicate to the customer.
h) Deseeding communication should be sent to the customer. If the customer has registered his mobile number, then a SMS may be sent to this effect.
Reconciliation between Aadhaar numbers in CBS with NPCI mapper
While daily seeding and deseeding of Aadhaar numbers will ensure that the Aadhaar database in CBS of the bank is in sync with NPCI mapper, it is essential for the banks to do periodic reconciliation between these two databases to ensure everything is in order.
a) The bank should obtain mapper data from NPCI on a periodic basis. It is recommended that the reconciliation is done on monthly basis. The Aadhaar numbers in NPCI mapper should be compared with the Aadhaar numbers in CBS.
b) If some Aadhaar numbers are present only in NPCI mapper and not in core banking, then bank should investigate to find out the root cause. Given that banks are expected to seed first in CBS and after that seeded in NPCI. As Mapper updation is expected to be an automated process, this scenario should not arise.
(Note: Practically many banks return the transactions with the reason ‘Aadhaar number not mapped to account number’. This effectively means either the bank has updated the mapper without updating in their core banking or there is an issue in core banking resulting in system not being able to map the Aadhaar number back to account number based on seeding at the time of transaction processing).
The bank should identify the issue and take immediate and permanent corrective action. This problem should not recur.
c) If some Aadhaar numbers are available in CBS, but not in NPCI mapper, it means that these Aadhaar numbers are not seeded in NPCI mapper or these Aadhaar numbers were rejected during the mapper upload process that was not properly monitored and corrected at that point in time. The bank should verify their core banking and follow the seeding process to seed these Aadhaar numbers again and reconcile with the response files to ensure seeding is completed.
d) Further to the above reconciliation, banks should have a standard process to download all Aadhaar numbers that are seeded for the accounts that are closed, blocked or frozen, customer deceased or become insane and deseed these Aadhaar numbers once a month so that any residual Aadhaar number that were not de-seeded due to any technical glitch will be de-seeded.
Moved in/out customer
When a bank receives a request from the customer for seeding, they may not be able to identify if the customer has an account with some other bank and seeding has been done by the other bank as well.
If a bank tries to map an Aadhaar number in NPCI mapper and if such Aadhaar number, if already mapped to another bank, subject to the new bank confirming that they have got customer mandate, the system will either move the Aadhaar mapping to the new bank or reject such request for updation.
As detailed in the seeding process the bank should verify the documentary proof and eligibility of an account to receive the subsidy before proceeding with Aadhaar mapping. Confirmation of having obtained the customer mandate should be given in Aadhaar seeding input file with mandate flag ‘Y’ and the date on which mandate is obtained. On every day, through scheduler reports, APB system will provide the list of Aadhaar numbers that have moved out from each of the affected banks.
The bank should obtain the list on daily basis and ensure that all the Aadhaar numbers listed in the moved out report are deseeded in their CBS. This process will ensure that CBS is in sync with the Aadhaar mapper of NPCI.
Deseeding data along with the reason for deseeding should be made available to front desk staff/officers so that they can answer customer queries. Bank should send a communication to the customer on de-seeding of the Aadhaar number with date along with the reason of de-seeding as “seeded with alternate bank”. It is preferable to send SMS wherever customer mobile number is registered.