MUMBAI: Another disappointment awaits the government. Leading banks are set to oppose the Reserve Bank of India diktat that all new ATMs and point of sale (POS) machines should be tailored to accept Aadhaar — one of the widely publicised ventures aimed at winning votes and changing the lives of millions.Last week, senior bankers went into a huddle to list out the pitfalls of the central bank’s directive, which they think is being rushed through without understanding the implications for banks.On November 26 evening, an innocuous RBI communiqué to banks said that “all new card present infrastructure has to be enabled for both EMV chip and PIN and Aadhaar (biometric validation) acceptance”. What it means is that any new ATM put up by a bank or POS machine (where a credit or debit card is swiped for payments) sold to a merchant establishment post November 26 must have biometric readers.The directive, it’s believed, follows the Centre’s overarching agenda to make Aadhaar a success by enabling people to withdraw money from ATMs, receive benefits in their bank accounts and make payments for purchases by simply putting their fingerprints.All this can happen once a person with an Aadhaar card asks her bank to link the 12-digit Aadhaar number with bank account.Banks think it makes no sense. “Why should we spend hundreds of crores in changing network when the same thing can be achieved with existing technology?” said a senior banker. On December 3, the payments committee under the banking lobby, Indian Banks’ Association, met to discuss the matter which will soon be taken up with the regulator.“While RBI has said that banks may issue cards without the Aadhaar feature, the POS machines and ATMs have to be mandatorily Aadhaar-enabled. Now, if banks don’t issue credit or debit cards that are enabled for Aadhaar acceptance, why should we procure new types of ATMs and POS for a handful of customers who prefer biometric readers for transactions?” said a panel member.Banks rarely defy RBI instructions.But this time they plan to point out difficulties in implementing the directive. The minutes of the payments committee meeting has been circulated to most banks and the association will soon write to RBI. A few banks have decided not to install new ATMs and POS till the issue is sorted out with the regulator.Some of the bankers and service providers ET spoke to say their entire network has to be overhauled for the purpose.“Data on the magnetic strip of a credit/debit card is transmitted through telephone lines. Biometric data will need high-speed connections and the bandwidth and capability has to be raised. Besides, in biometric mode, response time and rejects may be higher and transactions could take longer,” said a service provider.Among other things, said a banker, there are not enough manufacturers who can supply ATMs or POS that accept traditional cards with magnetic strips, EMV pin and chip, as well as equipped with biometric readers for accepting Aadhaarbased transactions.As a result, cost could go up, they argue. (In EMV cards — a recent technology that’s fast catching on — sensitive information like card and CVC numbers that are usually printed on the back of a credit card are encrypted and therefore believed to be safer.A biometric authentication involves the bank’s ATM or POS reading the fingerprints and matching them with the fingerprint records aggregated by authentication service agents such as VISA, National Payments Corp or Vodafone before transaction is cleared.)“Also, who will maintain biometric devices? Is the service infrastructure good enough? How will you resolve a dispute? Suppose you buy a TV and pay by putting your fingerprints on the POS machine. If the set turns out to be defective and you return it, is there is a standard mechanism on how the money will be credited back to you?” said a banker.The Unique Identification Authority of India UIDAI ), the agency led by Nandan Nilekani , the co-founder and former CEO of Infosys , issues the 12-digit Aadhaar numbers.The organisation, strongly backed by the government, has been insisting on biometric authentication for credit card and ATM transactions. RBI, under former governor D Subbarao, set up a working group to look into the feasibility of Aadhaar-based payment authentication.ET had reported in July that leading banks had voiced discomfort over the use of biometric authentication for payments and even conveyed their views to the working group headed by a senior SBI official. The findings of this group are not known, as RBI, rather uncharacteristically, preferred not to put up the report on its website.“We think certain observations by the working group did not go down well with RBI as well as UIDAI...Nonetheless, they should have made the report public,” said a person familiar with the subject.