Power of Aadhar - True potential to be unlocked !

Last week, we decided to upgrade my wife's phone connection from a pre-paid to a postpaid plan. After swirling around the town, we landed up in a showroom in Ashok Nagar. The showroom was
very busy and filled with people. All of the representatives were quite engaged in conversations with customers.  In fact, the store had a token system for customers to be serviced in order, by the Airtel representatives. We took a token and patiently waited for our turn. While waiting for our turn, my wife told me "I don't have a passport sized picture. Would that be a problem?". I gave her a stare, not knowing how to react to that.

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I looked around and saw some applications hanging off the shelf in the wall. I pulled a postpaid upgrade application form from the shelf. It was longer than the application form to apply for a H1B visa in US consulate. They had a place to affix photograph. "Oops!" I thought. I made my wife to sit inside the store and walked out to check if there is any instant passport photo shop nearby. I couldn't spot one. I walked back into the Airtel store with disappointment.

Around that time, one of the representatives called our token number. We walked to him and occupied the chairs in front of him. He looked at us and asked for the application form, photograph, address proof and ID proof. I told him with a "sorry" face "Sir! We don't have a passport sized photograph. We just have the Aadhar card. Would that be enough?". He said "No problem sir ! That would be enough". He pulled out a small finger print reader, connected it to his mobile phone... and opened an application from the mobile. He entered the Aadhar number and asked my wife to put her thumb on the finger print reader. The mobile application immediately pulled all of her information from the Aadhar database - picture, address etc., He entered the old pre-paid mobile number, selected the basic postpaid plan and clicked submit. He said "Sir! The transaction is complete. You'll receive an SMS in another 4 hours and the migration to a postpaid plan would be complete".

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"Wow! No application form... no signatures ... no photocopies of proofs "... I was spellbound when I saw that. The experience that I had in the Airtel store was on par with some of the mobile activation experiences that I've had in the US (or even better than that). I was amazed by the power of Aadhar. I'm now quite excited to see other Aadhar integration applications. I'm hoping that we will soon live in a world, where we don't have to remember two dozen usernames and passwords. On one side I'm excited of the simplicity of Aadhar and on the other side, I'm nervous about its security features. In a country like India, it is very hard to protect online services from hackers. Hopefully, Nandan Nilekani had done a thorough job on the security of the Aadhar services, too. I feel that India is very well positioned to enable digital identity verification and digital payments with services like Aadhar based validation and UPI payments. We have the potential to leap frog some developing / developed nations in digital payments / customer identity validation.

Loan application process in India - very simple

The last decade in India has brought a remarkable transformation in our society and people's spending pattern. A drive on the Indian roads will tell you that the number of ATM machines/Banks have increased many folds. The ATMs/Banks want you to withdraw cash or get loans and SPEND. From a 'savings' based society, India is trying to morph into a 'spending' society.

It is hard to find people in the salaried class, without a house loan or a car loan to pay. You are sure to run into representatives of Banks trying to sell Credit Cards or Loans... especially in places like shopping malls. You'll get a call from these 'hunters', right after you open your bank account or when you get a new mobile connection.. You'll even get marketing calls/text messages on your mobile about Credit Card offers or Loan offers. These offers are at times very tempting that you find it hard to resist.

Recently, I applied for a car loan in HDFC. The process is very simple. You can apply for a car loan through their web interface. All you need to do is just provide your personal details and select the loan amount you want. I got a call from the Service Rep, in just 5 minutes after pressing the "Submit" button for loan application. You don't even have to go to the bank. They'll send reps to your house to collect all the necessary documents.

Unlike in US, where loans are issued based on the credit history of a person, Indian banks go through a manual verification procedure. I think banks outsource the verification process to a 3rd party. They'll send Reps to your home, work place etc., to verify your records. This process is at times, very unpleasant/awkward. They make sure that all the information you had furnished is accurate. I was quite surprised by the time they took to process the loan application. In just 2 days, the loan application got approved.

The loan application procedure is more or less similar for other banks, too. I heard that government owned banks take a longer time to process the loan application. On the other hand, government owned banks provide you a better interest rate when compared to privately owned banks. You can even bargain/negotiate interest rates with banks. For example, I was able to negotiate the rates to bring it down by 2%. If you are a long-time customer of a bank, you get some special treatment on the interest rates.

When you apply for loans, it is better to check with 2 or 3 banks and pick the best offer. Since the whole process gets completed in a few days, it is worth the try.

How to apply for Credit Freeze during R2I?

Social Security Number (SSN) is THE most important identification number for you during your presence in US. SSN is linked to all of your accounts, and you should keep it very safe. There are folks who ask "Should I return/cancel my SSN when I return back to India?". The answer is NO. SSN once assigned stays valid, even if you are out of the country. It is your responsibility to keep it safe and prevent it from mis-usages. So, what should you do to your SSN, when you Return to India? How do you prevent people from misusing your SSN, after your R2I?

You should put a credit freeze on your SSN, before leaving the country. There are 3 credit bureaus that track your credit history - Equifax, Experian & TransUnion. You've to apply individually at each of the credit bureaus for credit freeze. Here are the links for you to follow-on:

Equifax Credit Freeze
Experian Credit Freeze
TransUnion Credit Freeze

Social Security website allows you to block electronic/telephone access to your personal information. However, it doesn't stop the credit bureaus from performing credit checks. Hence, it is highly recommended for you to apply for credit freeze, at the individual credit bureaus.

If you are extraordinarily rich, you can also sign-up for identify theft services such as Lifelock, that provide extra protection.

Applying for credit freeze should be one of the important things to do, in your R2I checklist.

Also read:

R2I Planning Guide
R2I - How can I get my Social Security benefits/money?