Adhaar Payment Bridge System

Financial inclusion is expected to be a key application of Aadhaar authentication. Adoption of Aadhaar and Aadhaar authentication in Indian banking system is expected to change the financial landscape of country.

  • Aadhaar Payments Bridge System (APBS) – A system that facilitates seamless transfer of all welfare scheme payments to beneficiary residents' Aadhaar Enabled Bank Account (AEBA)

Aadhaar Payments Bridge System
APB is a repository of Aadhaar number of residents and their primary bank account number used for receiving all social security and entitlement payments from various government agencies.

It requires using Aadhaar number as the primary key for all entitlement payments. This would weed out all fakes and ghosts from the system and ensure that the benefits reach the intended beneficiaries.

This benefit has an even greater ramification as more and more social security programs are moving from in-kind to in-cash subsidies.

APBS Process Steps
The key steps in posting payments via APB are:
  • Service delivery agency that needs to make payments to its beneficiaries (such as MGNREGA wages, scholarships disbursement, old age pension etc.) provides APB File containing details of Aadhaar number, welfare scheme reference number and the amount to be paid to its bank (called sponsor bank).
  • Sponsor bank adds bank IIN (Institute Identification Number provided by NPCI to participant banks) to the APB file and uploads onto NPCI server.
  • NPCI processes uploaded files, prepares beneficiary bank files and generates settlement file
  • Settlement file is posted to bank accounts with RBI.
  • Destination banks can download the incoming files for credit processing after the settlement file has been processed.