Understanding Aadhaar-Enabled Payment System (AEPS)

The Aadhaar-Enabled Payment System (AEPS) is a payment service that allows bank customers to use Aadhaar as their identity to access their Aadhaar-enabled bank account. Using a Business Correspondent (BC) or a micro ATM, a customer can perform basic banking transactions like cash deposit, cash withdrawal, balance enquiry, and fund transfer.

Analyzing Statements about AEPS

Let's look at each statement to determine which one is not true about AEPS.

Statement 1: AEPS enables bank customers to access their Aadhaar-linked bank accounts through the Aadhaar authentication.

This statement is true. The core functionality of AEPS relies on using Aadhaar authentication (typically fingerprint or iris scan) to access the bank account linked to that Aadhaar number.

Statement 2: For a transaction through AEPS, only Aadhaar number and fingerprint captured during the enrolment are required.

This statement is mostly true in terms of authentication, as Aadhaar number and biometric (like fingerprint) are primary requirements for authentication. However, for a transaction, the customer also needs to specify the bank name where their Aadhaar account is linked. So, while the core identification uses Aadhaar and biometric, bank details are also necessary for routing the transaction. The statement implies *only* Aadhaar number and fingerprint are required, which slightly misrepresents the complete transaction flow, but it is often cited as the key requirement for *authentication*.

Statement 3: AEPS allows inter-operability among different systems adopted by different banks in a safe and secured manner.

This statement is true. One of the main benefits of AEPS is its inter-operability. A customer of Bank A can perform an AEPS transaction at the micro ATM or BC of Bank B, provided their Aadhaar is linked to their Bank A account. This makes banking accessible even in remote areas.

Statement 4: AEPS is aimed at empowering the marginalised and excluded segments to conduct financial transactions through micro ATMs deployed by banks in villages.

This statement is true. AEPS was specifically designed to promote financial inclusion, making banking services accessible to people in rural and remote areas, including marginalized groups, who may not have access to traditional bank branches. Micro ATMs and BCs are key components of this strategy.

Statement 5: Customers can find out their account balance, deposit cash, withdraw money and transfer funds to other Aadhaar-linked bank accounts through the help of business correspondents of the bank they have account in.

This statement is not true. While customers can perform these transactions through business correspondents or micro ATMs, they are not limited to using only the BC of the bank they have an account in. Because of the inter-operability feature (as stated in point 3), a customer can use the AEPS service provided by the BC or micro ATM of *any* bank to access their Aadhaar-linked account in *their* bank.

Conclusion

Based on the analysis, Statement 5 is the one that is not true about the Aadhaar-enabled Payment System (AEPS). AEPS's strength lies in its inter-operability, allowing customers to transact using the infrastructure of any bank's BC or micro ATM, not just their own bank's.