biometrics, banks and this seemingly ignored question of data security

In the beginning, only the National Population Register – and, a little later, Nandan Nilekani’s Unique Identification Authority of India – were supposed to capture and store biometrics. However, over the past few months, India has come to a point where myriad central ministeries, state departments and others are camping in the country’s villages and towns, capturing fingerprints and scanning irises, and storing them in their servers. One of the first-movers in this direction, and probably one of the largest collectors of biometrics, is the banking system which thinks biometrics will help it ensure welfare payments go only to the targeted beneficiaries.

This profusion of databases, however, raises an important question — about whether the biometrics being collected are being securely stored or not. To get answers to that question, ET did an email interview with B Sambamurthy , the director and CEO of the RBI’s Institute for Development and Research in Banking Technology (IDRBT).
IDRBT, i should add, is one of the central institutions in the country working on establishment of common standards for the entire banking system. Read on. Here.

the case of the surprising amendment to the mfi bill

A last-minute change in the bill to govern microfinance institutions has sent banks and MFIs into a tizzy. The bill has raised the loan credit limit tenfold, a move that could alter the character of these lenders from tiny loan providers to the poor to financers of the relatively affluent.

yep. after all the reports of mfis overlending to the poor and pushing them into debt traps, the rbi had introduced a loan limit of rs 50,000 for each borrower. and now we find that the draft MFI bill which has just been introduced in the parliament has upped that credit limit to an incredible rs 500,000. today’s ET carries a (reassuring) story on this change and how it entered the bill.

there are other differences between this bill and its previous avatar — released for public comments last june. but on the whole, this seems to be a better bill than the previous one. better safeguards.

of banks, state firmans, bids and outcomes

it is official. the bidding process to find a common banking correspondent company for all of maharashtra is over. vakrangee has won with a bid so low banking correspondent companies can scarcely believe it. see this, this and this for context.

now to see how well this new approach works.

dov ospovat and the development of darwin’s theory

i am finally reading dov ospovat’s the development of darwin’s theory. back in 2009 when i was studying the drafting of the forest rights act, i had read the origin of species. interspersed in that book were little paragraphs where darwin described numerous experiments he had conducted in the years after he got off the beagle, testing out answers to different puzzles thrown up by biogeography — the science which studies the distribution of species.

for instance, to understand why similar trees are found in coastal areas, he left a bunch of their seeds in sea water for weeks and months and then planted them and tried to see how many blossomed into plants — this was his test to see whether seeds could be dispersed by oceanic currents, and then take root on farflung shores. similarly, as he says in the book…

I suspended a duck’s feet, which might represent those of a bird sleeping in a natural pond, in an aquarium, where many ova of fresh-water shells were hatching; and I found that numbers of the extremely minute and just hatched shells crawled on the feet, and clung to them so firmly that when taken out of the water they could not be jarred off, though at a somewhat more advanced age they would voluntarily drop off. These just hatched molluscs, though aquatic in their nature, survived on the duck’s feet, in damp air, from twelve to twenty hours; and in this length of time a duck or heron might fly at least six or seven hundred miles, and would be sure to alight on a pool or rivulet, if blown across sea to an oceanic island or to any other distant point.

the book is filled with accounts of similar experiments. passages like this must have filled everyone who read the origin… with wonderment. 18 years lapsed between darwin getting off the beagle and the publication of the origin of species. in this period, he was obviously very busy, fastidiously thinking through the question of how life evolved and spread across the planet, and testing myriad hypotheses.

and then, while reading janet browne’s the secular ark, which traces the — well — evolution of our thinking on evolution, i came across a reference to ospovat’s book.

and guess what it focuses on — on that 18 year period! a history of science, the book painstaking reconstructs the development of darwin’s thinking on what david quammen called the question of questions — the distribution of life on the planet — and locates darwin amongst his peers.

some weeks ago, i finally began reading this book in earnest. i am about two chapters down. i am reading slowly. underlining and scribbling with gusto.┬áthis is such a lovely, careful, magisterial book. one filled with such gentle epiphanies that it summons the title of a book by richard feynman to mind — the pleasure of finding things out.

it is also a poignant book to read. dov ospovat died of cancer shortly after finishing the manuscript of this book. he was 33. such a shame that is. such a brilliant, pathbreaking book. and the author taken from our midst so young.

i am thinking that i will finish this book and then start work on a chronology on how human thought on evolution developed. might be an interesting way to trace the incremental, collaborative manner in which ideas — again — evolve and take root. hmmm.

ps – while we are talking of darwin, the last paragraph in the origin has to rank among the finest pieces of science writing ever. it gives me goosebumps.

It is interesting to contemplate an entangled bank, clothed with many plants of many kinds, with birds singing on the bushes, with various insects flitting about, and with worms crawling through the damp earth, and to reflect that these elaborately constructed forms, so different from each other, and dependent on each other in so complex a manner, have all been produced by laws acting around us. These laws, taken in the largest sense, being Growth with Reproduction; inheritance which is almost implied by reproduction; Variability from the indirect and direct action of the external conditions of life, and from use and disuse; a Ratio of Increase so high as to lead to a Struggle for Life, and as a consequence to Natural Selection, entailing Divergence of Character and the Extinction of less-improved forms. Thus, from the war of nature, from famine and death, the most exalted object which we are capable of conceiving, namely, the production of the higher animals, directly follows. There is grandeur in this view of life, with its several powers, having been originally breathed into a few forms or into one; and that, whilst this planet has gone cycling on according to the fixed law of gravity, from so simple a beginning endless forms most beautiful and most wonderful have been, and are being, evolved.

ps – indeed. “There is grandeur in this view of life, with its several powers, having been originally breathed into a few forms or into one; and that, whilst this planet has gone cycling on according to the fixed law of gravity, from so simple a beginning endless forms most beautiful and most wonderful have been, and are being, evolved.” Amen.

Fixing India’s Agricultural Soils

Some days ago, agriculture minister Sharad Pawar took most people by surprise when he said the UPA government was planning to redirect India’s fertiliser subsidy towards organic and balanced fertilisers. Time will tell if he was serious. In the meantime, here is a small story I wrote for ET’s website on why this announcement was urgently needed, and what a clutch of dryland agriculture experts say about how India should make this transition.

Also see this and this.

and now for something completely different

i spent a large chunk of sunday reading the first two volumes of jason lutes’ graphic novel called berlin. set in the late nineteen twenties, the books recreate a time in the city when fundamental forces had been unleashed in germany. rearmament was secretly underway. fascism and socialism were competing for the soul of the city. the great depression was about to break out.

one of the characters is a veteran journalist who sees germany hurtling towards disaster but is slowly realising that his words do not have any impact. here is something, a tad more optimistic, a much more strategic way of looking at journalism, that he says in the early parts of the book.

I imagine the daily output of the entire newspaper district. It makes me think of drowning, but I want to be able to see it another way. Instead: human history as a great river, finding its course along the lowest points in the landscape, and each page as a stone. Tossed in without purpose, just to see the splash, thousands of them might raise the water level until it escapes the confines of the riverbed. The water spreads out, the force of the river diminishes, before long, a marsh. But if each stone is placed carefully and with purpose, perhaps something can be built. Not to dam the current, but to divert its course.

(berlin: city of stones, jason lutes).


Today’s Economic Times carries this story about an unexpectedly large change that is sweeping across the Bank-BC model. The Department of Financial Services, the part of the Finance Ministry which looks after the banking sector, has decided to split the country into 20 clusters and get all public sector banks in that region to work through a common Banking Correspondent company. This radical makeover of the sector is making a bunch of people, including banks, very nervous. They fear this could result in the rise of monopolistic tendencies amongst BC companies. Click here to read more.

a friend turned foe?

Anyone watching the telecast of the 2012-13 budget would have concluded that the Finance Ministry was solidly backing Nandan Nilekani’s Unique Identification Authority of India. The budget speech mentioned Nilekani by name. It mentioned the UID programme ten-odd times. And spoke about how Aadhaar would be used to overhaul existing subsidy regimes in India — from food to fertiliser.

Well. It’s now time to ask if that was the correct conclusion to draw. In an unexpected development, the Department of Financial Services (DFS), the unit of the finance ministry looking after the banking sector, has kicked off its own pilots for biometric authentication. A decision that a senior official in the UIDAI describes as a “purely anti-aadhaar play”.

See here. My story on a surprising development that raises large questions. For one, is this just cussedness by the department? Or is the government starting to create backup plans to Aadhaar so that cash transfers can be set in motion by 2014, Aadhaar or no Aadhaar?

the case of the missing agricultural credit

and now for a question that is puzzling policymakers. over the last 10 years, rbi numbers estimate agri credit has gone up 755%. go with the budget numbers and agri credit has spiked from rs 51,000-odd crore to rs 575,000 crore now. and yet, look at changes in agricultural output, production, expenditure on agri inputs, etc, and you see far, far more modest jumps. yields, for instance, have gone up a modest 18%. it raises a question on where this great avalanche of cash is actually going.

this story out today raises that larger question and advances some possible explanations. it would be great to see more research on this matter, though.