The Unique Identification Number (UID) can pave the way for a more secure and robust distribution system and play a major role in financial inclusion, suggested Nandan Nilekani, chairman, Unique Identification Authority of India, at the IIEF Pension Policy conference here.

Talking about the success of the telecom industry in the country, Nilekani stressed on the need to harness technology to increase the penetration of financial services. Today, most of the distribution systems in the country — be it post offices, bank branches or village panchayats — have flaws and there is no certainty that the payments made reach the intended beneficiaries, he said. There are a lot of ghost accounts in the case of the National Old Age Pension Policy that runs in several states.

“We don’t know how many real people are getting it (benefits), how many are duplicates, whether payments are made on time... Our view is that you can address these flaws in a distribution system if you can have a million-plus banking correspondents with a UID-enabled cell phone and fingerprint reader,” said Nilekani.