Did Nandan Nilekani push the RBI for Aadhaar authentication for digital payments in 2013?

10 January 2019

On 8 January, the Reserve Bank of India set up a five-member panel headed by Nandan Nilekani, the technology billionaire who was the first chairperson of the Unique Identification Authority of India, or UIDAI—the parent agency for Aadhaar—to improve digital payments in India. The high-level panel will propose measures to “strengthen the safety and security of digital payments.” Besides Nilekani, the panel comprises HR Khan, a former deputy governor of the RBI; Kishore Sansi, a former managing director and CEO of Vijaya Bank; Aruna Sharma, a former secretary in the Ministry of Electronics Information Technology; and Sanjay Jain, the chief innovation officer at the Centre for Innovation Incubation and Entrepreneurship at IIM Ahmedabad.

In “The New Oil,” the May 2018 cover story of The Caravan, Aria Thaker reported on the mixing of public risk and private profit in the Aadhaar project. In the following excerpt, Thaker reveals the power that Nilekani wields in the Aadhaar ecosystem, and how the former UIDAI chairperson had pushed for having Aadhaar incorporated into bank-card transactions. In 2013, the RBI formed a working group to consider the use of Aadhaar to authenticate bank-card payments. According to a senior banking official, when the group’s conclusions proved to be critical of Aadhaar, Nilekani “managed to get the RBI to suppress that report.”

Nandan Nilekani, though he is no longer the chairman of the UIDAI, still wields immense power in the Aadhaar ecosystem, in both private and public realms. Aadhaar was his brainchild, and his appointment to lead the project, in 2009, was fully backed by the Congress-led government of the day. He was listed as a mentor to iSPIRT on the group’s website as late as in May 2017, though his name has been removed from it since. [iSPIRT is a non-profit entity that develops and promotes India Stack, a set of Aadhaar-specific application programming interfaces, or APIs, which are building blocks in the software architecture required by many third-party entities to use Aadhaar.] His influence and connections as a technology investor run deep, especially in Bengaluru, and only stand to get deeper—last year, he backed a new $100-million venture capital fund called Fundamentum. As a politician—Nilekani left the UIDAI in 2014 to join the Congress, and ran a failed campaign for a Lok Sabha seat from Bengaluru—his reach extends all the way to the highest circles of power at the national level.

The 2014 general election was a time of great uncertainty for Aadhaar. The BJP’s record of opposition to Aadhaar suggested the party would move against the programme now that it was in power. Narendra Modi himself, just weeks before he became prime minister, had tweeted, “On Aadhaar, neither the Team that I met nor PM could answer my Qs on security threat it can pose. There is no vision, only political gimmick.”

But Modi was quickly won over. The journalist Shankkar Aiyar, in his 2017 book Aadhaar: A Biometric History of India’s 12-Digit Revolution, wrote that the new prime minister met RS Sharma, an officer of the Indian Administrative Service and the UIDAI’s first director-general, soon after his swearing in. According to Aiyar, Modi immediately asked Sharma if it was feasible to have Aadhaar-linked biometric systems to track attendance at all central government offices. Sharma said it was, and Modi replied, “This must be done.” Shortly after this, Nilekani also met with Modi. In a television interview in 2015, Nilekani said, “I did have one meeting with him after the election, where I told him about the value” of Aadhaar.

Aria Thaker is a journalist who reports on the intersection of technology and politics for Quartz India. She was formerly a copy editor at The Caravan.

Keywords: Reserve Bank of India privacy Aadhaar Nandan Nilekani digitalisation UIDAI