The 'Saral Money' account from Visa, Axis Bank, HDFC Bank, Icici Bank, Indian Overseas Bank and the State Bank of India is designed to solve the long-standing problem of how to authenticate the many millions of Indians without existing bank accounts or adequate forms of ID.

It taps into the government's Adhaar national identity system - which uses fingerprint and iris biometric information - to verify users and authorise payments.

Both the account and the associated biometric data are securely hosted by the new national ID system, which is run by the Unique Identification Authority of India (UIDAI).

Once a person receives an Aadhaar, they are automatically eligible for Saral Money and just provide their registration letter at a bank to be issued with a branded Visa account, complete with pre-paid card, immediately.

Prior to this, potential customers would have had to provide numerous documents to verify their identity, which automatically excluded hundreds of millions of people, says Visa.

Having opened their account, they can use Saral Money to make purchases, send money, or receive government payments electronically.

By linking Visa accounts to the national identity system, customer identities can be verified via biometric recognition data stored centrally, for instance by running fingerprint scans at newly designed micro-ATM's when they wish to pay or withdraw cash.

The Micro ATMs are portable biometric POS devices and laptops designed to overcome the lack of bank branches in parts of the country. Visa serves as the network which links the banks to the government's identity database and is currently the only authorised international payment network for the initiative.

There are currently 210 million Aadhaar card holders, with the government planning to expand this to 600 million by 2015. The Saral Money account will first be rolled out in New Delhi and the National Capital Region, with expansion to the rest of the country targeted for completion by the end of next year.

Elizabeth Buse, group president, APCEmea, Visa, says: said, "This initiative is a critical milestone for India as it solves the customer identification problem when it comes to opening bank accounts. The biometric solution is unique and we're delighted to be playing a central role in the program."