Indian Telecom Story (Part XXII): Mobile banking guidelines laid out
RBI Christmass gifted a relaxed and a more wider ambit to the banking and telecom eco-sytem in India with wider and more relaxed mobile payment transaction and banking guidelines
In the overall context the number of cell phone users is four and a half times the total number of bank accounts in India. So mobile banking is being looked at as an option for providing transfers across the length and breadth.
The transaction limit: Essentially the RBI has now said that banks will be able to do transactions with a daily cap of Rs 50,000 per customer for both funds transfer as well as transactions involving purchases of goods and services. Presently the transactions are subject to caps of Rs 5,000 and 10,000 respectively.
Lower Value transactions: RBI has relaxed the technology and security standards and allowed banks to undertake transactions upto Rs 1,000 without end to end encryption. So, they have basically in some ways reducing the cost of transactions.
Remittance of funds for disbursements in cash: Directly related to facilitating the use of mobile phones for cash. In the prepaid mobile phones which accounts for about 90% of the entire user base across the country, the transaction is essentially a cash transaction where the user puts in money, gets the credit and uses it. Mobile phone companies have been therefore talking about extending this for direct transfer so if you have a phone in Delhi where a person adds Rs 1,000 that money can be delivered somewhere in the hinterland of Bihar or UP. The maximum value of these transactions will be Rs 5,000 per transaction; the banks can place a cap on the velocity of such transactions subject to a maximum of Rs 25,000 per month per customer. The disbursal of these funds can be done through both, an agent or an ATM.
Given the lack of infrastructure/ATMs and Banks in the rural areas, banks have been allowed to appoint agents to do such transfers. Some of these agents could well be the mobile phone operators, the service providers and the handset resellers in the hinterland.
Analysts and experts and banks see this as a big push for financial inclusion across the country. Also, this is a move for retail payment from cash and cheque based transaction to mobile based transaction, which means great convenience and also reduces costs. While Operators, device makers and banks will now be able to drive this initiative across the geography, it is the consumer in India who will now be able to exercise more convenience for the money that he owns.