Ever since demonetisation was introduced, the government has been making a strong push for the adoption of digital payment systems. With the government now trying to make Aadhaar the basis for achieving a unified financial infrastructure, those without access to banking systems or Aadhaar will soon find themselves excluded from the economy. One such group will be the refugees living in India.
Although India has not signed the Refugee Convention and does not have a domestic asylum law, it has a history of being a generous host to refugees. However, refugees do not have a formal legal identity and are often wrongly perceived to be “illegal immigrants”. This ambiguous status has forced them to the margins and has left them wholly dependent on the parallel economy for their survival. Its collapse in the aftermath of demonetisation had a devastating impact on refugees, especially women, who lost every avenue for their sustenance. The lack of documentation to open bank accounts rendered them without the means to convert their cash into new currency, and virtually wiped out their entire savings. They struggled even to buy essential provisions or avail medical services.
Refugees in India typically have a refugee card; a limited number have temporary visas. Those who tried opening bank accounts with these documents report that banks refused to recognise these as valid documentation for proof of ID or residence. Now with Aadhaar becoming mandatory to access any financial service, it is not clear whether refugees are eligible to apply for the same. While the Aadhaar Act states that anyone residing in India for 6 of the 12 months preceding the date of the application is eligible to obtain the card, many refugees who fulfil this requirement report that they have been turned away by local Aadhaar centres. Thus, it is almost impossible for refugees to open a bank account. This has forced them to remain at the mercy of local agents and touts, which is contributing to the perpetuation of the parallel economy.
Need for a formal legal identity
As policies are created in the aftermath of demonetisation, it is critical for the government to take steps towards integrating such marginalised groups into the mainstream. It is recommended that the government confer a formal legal identity to refugees and issue uniform documentation to this community. With regard to Aadhaar, the first step would be to clarify whether refugees are eligible to apply for the same. There have been some concerns that the possession of Aadhaar would allow non-nationals to access schemes meant exclusively for citizens; however, this can be addressed by issuing a limited version of the Aadhaar card to refugees. Alternatively, the government can also explore the possibility of allowing refugees to use other forms of documentation such as their refugee card and visa, to access basic financial services. Without such measures, the core objective of demonetisation — eliminating the underground economy and achieving full financial inclusion — will remain an unfulfilled vision.
Roshni Shanker and Ishita Kumar work at The Ara Trust, a centre for refugee law and forced migration studies based in New Delhi