Once a sizeable chunk of population gets a Unique Identification (UID) Number, banks could do away with the KYC (know your customer) process for small value or nofrills account.

KYC is the due diligence performed by banks and other financial institutions to identify their clients and ascertain relevant information that is required to do business with them.

The Unique Identification Authority of India , Chairman and former Infosys co-chairman, Nandan Nilekani made a presentation on how UID could help hasten the process of financial inclusion.

However, the process of developing UID database would be a long process due to country's huge population. According to a senior bank official, banks might not give up KYC norms any time soon "The UID authority made a presentation to RBI in which it said it will play a facilitative role in financial inclusion," said K Ramakrishnan, chief executive of the Indian Banks' Association (IBA).

He pointed out that keeping RBI's guidelines of financial inclusion, the UID authority was working on preparation of standards for micro ATMs, etc.

The authority, set up under the Planning Commission, will provide an identity to every citizen to establish citizenship and address. The project is expected to be operational in the next 12-18 months.