Digital India : JAM and India

Technology Stack
RS Sharma
Chairman, Telecom Regulatory Authority of India (TRAI)
cp@trai.gov.in
 A Mission to transform India into an
empowered society and digital economy
Vision of Digital India
Digital Infrastructure as a utility
to every citizen
Governance and Services on
Demand
Digital Empowerment of citizens
Nine Pillars of Digital India
 JAM Trinity

Jan-Dhan • A massive program of Financial Inclusion

• More than 300 million bank accounts opened

Aadhaar
• Digital-online ID Infrastructure
• 1.2 billion IDs issued
• Unique, online and Authenticable

Mobile
• Tool to access internet and service delivery
• More than a billion mobile phones in India
• Lowest tariffs in the world
 Pradhan Mantri Jan Dhan Yojana

313.4 Million beneficiaries banked so far

₹ 765.8 Billion balance in beneficiary accounts
126 Thousand Bank Mitras delivering branchless
Banking services in Sub-service Areas
And Counting…

Source: As on 20 March 2018, http://pmjdy.gov.in

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 Accelerated by Regulatory Innovation
2nd Aug 2016

49 Years, 14 New Banks +21 On Tap

Banking Licenses

1969 1980 1993 2001 2014 2015 2016

+2 +2

+10
Ushering in a new ERA of
BANK
NATIONALIZATION New Banks DIFFERENTIATED BANKING
 Access, Cost and inter-operability are the key factors to take
Jan-Dhan forward

Onboarding Break Even Target Market

Cost Investment Size

Rs 1500 Rs 300,000 3M Households

Rs 100 Rs 20,000 34M Households

Rs 10 Rs 2,000 105M Households

Source: NCAER-CMCR survey, http://ww.openthemagazine.com, discussions with ScripBox

Aadhaar: Context for the Digital Identity Infrastructure

Provision of a
robust, reusable
ID to those who Improve
do not have any Targeting and
formal ID Delivery of
document Services

To clean up existing Reduce cost

databases from ghosts of Delivery of
and duplicates Services
Name
DoB/Age
Gender
Address
Mobile/Email

1234 5678 9012

Unique
Lifetime

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 Features of Aadhaar
Only Numbers – No Smart Cards

Random Numbers – No Intelligence, No Profiling

Voluntary in nature

All Residents – Including Children

Uniqueness – Ensured through biometric attributes

No Guarantees to Citizenship, Rights, Entitlements

Ensuring Security and Privacy of Information

Ubiquitous Authentication – From No ID to Online ID

 1.2 Billion in 6½ Years
A Ubiquitous Digital
2011 50 M Identity
2012 100 M Infrastructure for a
2013 300 M
digital India

2014 600 M
Aadhaar system can
authenticate 100 M
950 M
2015
transactions per day,
2016 1064 M in real time!
2017 1192 M

Source: Data from http://www.uidai.gov.in 13

 Service Delivery Potential of Aadhaar

• Uniqueness and Existence ensures no fakes or duplicates

• KYC for multiple services : Bank accounts, Financial inclusions,
Mobile Connections, Social Assistance Programs
• Entitlements should reach the intended beneficiary – non-
transferability can be ensured by authentication at the point
of service delivery
• Many domains will be able to use as a proof of presence for
the beneficiary

• Identity platform for various domains

• Aadhaar online authentication provides a common
platform which can be used across all applications.
 Aadhaar
Authentication
NO MORE PHYSICAL PRESENCE

Are you who you claim to be?

Only a yes/no answer
Anytime anywhere
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Aadhaar
e-KYC

NO MORE PHOTOCOPIES!

Access ONLY via authentication

No more fake identities
No more paper
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 Digital Locker
Open API based

Issues Documents Accesses Documents

Digitally Online

Issuer DigiLocker Requestor Ecosystem driven

Approves
Access
Digitally protected

Source: https://digilocker.gov.in Users 17

An ‘hour-glass’ platform architecture
Applications
DBT SIM Digital ● Minimal
locker
UPI AEPS ● Standardized
APB
● Simple design
esign
● Easy to execute
● Easy to write a law

Biometric
Identity as a utility, an enabler
Sensors Allows innovation on all sides
Phones Tablets Amplifies ecosystem players
Micro Check-in
ATM Device
Devices
 Financial Inclusion:
Aadhaar-based Technology Enablers
• Open Bank Accounts using Aadhaar
• Linking of Aadhaar to existing bank accounts
• Aadhaar Payment Bridge (APB)
• Simplifies disbursal of funds – uses only one
account for all disbursals

Transactions • Aadhaar Enabled Payments System (AEPS)

(AEPS) • Inter-operable, portable anytime anywhere
A direct pipe to the Resident
Mobile
 Mobile ‘Revolution’
• One of the fastest growing telecom markets in the world
• Annual Revenue ~US$ 40 Bn
• 1.1 Billion+ mobile connections
• Handles more than 18 Bn minutes of talk-time every day
• Lowest Tariffs in the world (1/3 Euro CentsPer Minute) and less
than a Euro per GB
• Vibrant and competitive market
• Data usage of ~1500 Petabytes per month
• Internet connections ~418 million
• Adding 25 Mn. Smart Phones per month
 Unified Payment Interface
Push & Pull Payments
Payments can be initiated by payer or payee.

Ubiquitous - Bank accounts Virtual Payment Address

Every one with a bank account can send

money to any bank account in India!
@ No need to disclose account information.
Allows account portability, enhances
privacy.

Easy Immediate Payments Validation & Assurance

Real-time posting Real-time validation of the
Funds are not locked! account and balance

Timely Notification Minimal Issuer/Acquirer Cost

Immediate notifications of
the payment made Smartphone replaces card
and PoS machine!!
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 UPI doing more txns than Credit Cards In 18 Months!

Right before demonetization,

UPI saw ~100k txn/month.

UPI is at ~170 Mn Txns in Feb

and ~3 Bn $
More transactions on UPI in
18 months than on Credit
Cards in 18 years!

Source: RBI website

 India’s Approach to Digital Infra vs other markets

Public Goods

Private Highways

Free Markets

Duopolies

Level Playing Fields

Great Firewall
 We will go from data poor to data rich nation in 5 Years!

Social

Commerce

Payment Machine Learning

& Algorithms

Paperless
Process

Digital
Identity
Cashless, Paperless & Presence-less
Service Delivery 26
These technology innovations and rich data will
also help solve the Credit Problem

Customers with the lowest default rates

have the highest interest rates

No
Sales Servicing
Credible
Costs Costs
Data

Solution : Market places

Self service platforms
Traces from Digital
Money Transactions

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 Electronic Consent
Architecture
All "data sharing" to be "via" the
"owner" with "consent"

"Owner" of the data can "electronically

request" his/her data and store in
his/her "digital locker"
DIGITAL
LOCKE

"Owner" can "choose" to share the

R

data "for a purpose" using Data Providers Data Consumers

"electronic consent"
(Banks,Telco, (Banks,Credits
Hospitals,etc) Providers etc)

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 Aadhaar is one of the most critical enabler for India’s technology stack
COMMERCE CREDIT INVESTMENTS
SKILLS OTHERS
(GSTn) (RBI) (SEBI)

Provides a modern privacy data Open Personal Data Store, E-

CONSENT LAYER sharing framework sign
STACK

Game changing electronic payment

CASHLESS LAYER systems and transition to cashless IMPS, AEPS, APB, and UPI
economy
INDIA

Rapidly growing base of paperless Aadhaar e-KYC,

PAPERLESS LAYER systems with billions of artifacts E-sign, Digital Locker

Unique digital biometric identity with

PRESENCE-LESS LAYER open access of nearly a Billion users
Aadhaar Authentication

JAM Jan Dhan, Aadhaar, Mobile

 Why is the India Stack disruptive?

Allows Innovation

Broad based, ubiquitous, No physical presence required

inclusive platform (reduces more costs)

Aligns market goals with

Cuts Onboarding Costs
social goals

Increases trust - allows a

Cuts Transaction Costs new business architecture
to emerge
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