In its proposed framework on mobile banking, an inter-ministerial group (IMG) has told the Telecom Regulatory Authority of India (TRAI) that customers in remote areas should be able to open accounts linked to their handsets and be allowed withdrawals of up to Rs 5,000.
Under the framework, a customer holding a mobile-linked account will be allowed to undertake five basic transactions through banking correspondents (BCs) or their sub-agents appointed by banks. Customers will also have to pay 2 per cent commission to the bank. This amount may reduce be reduced to 1 per cent over the next five years.
The IMG has also suggested that 0.15 million post offices across the country should be used to provide banking services via mobile handsets to people in rural areas.
As mobile banking is in its infancy in the country, the IMG framework aims at chalking out a comprehensive set of rules pertaining to the service, while providing greater regulatory clarity.
The IMG has suggested that customers can deposit money in their no-frills accounts, where there is no requirement of minimum deposit. Such account holders are not issued any chequebooks. The framework has suggested that the Reserve Bank of India should exempt banks from issuing passbooks or statements to account holders to keep the transaction cost at the minimum.
The five basic financial transactions on such accounts (cash deposit, credit customer’s mobile linked no-frills account, cash withdrawal, peer to peer transfer and balance inquiry) can be executed through a mobile based PIN system. Transactions can be carried out through mobile banking points of sale or through bio-metric based micro ATMs of the BCs or their sub-agents.
The IMG has also identified different stakeholders in the framework and has defined their roles. The group has also suggested that there should be a simplified common template for the know-your-customer (KYC) requirements for the mobile-liked account, which is acceptable to all service providers.
It suggested that RBI may constitute a committee with key stakeholders to create a simplified common template for KYC requirements for the mobile linked no-frills accounts, based on the norms and associated verification procedures evolved by UIDAI, which will be share-able across service providers.
It said that until such guidelines are finalised, the KYC requirements of no-frills accounts should remain applicable for mobiles, which will also facilitate transfer of funds of various Government schemes to account holders.
With regard to the fee for such services, the IMG has recommended that the charges levied in this regard should be regulated by TRAI and through competitive market forces, to ensure that they sufficiently cover costs incurred for secure communications without resulting in inordinate profits.
IMG suggested that a committee constituted by TRAI may also draw up guidelines to ensure high availability of associated communication services.
