The Telecom Regulatory Authority of India (Trai) and the Reserve Bank of India (RBI) have arrived at an agreement regarding the launch of mobile banking in the country. While Trai will take care of the interconnection part, RBI will handle the banking component of mobile banking. This includes maximum daily transaction limit, know-your-customer guidelines and verification criteria.
Earlier, there was apprehension among telecom operators of getting entangled in the regulatory issues, especially after the SEBI-IRDA fiasco regarding the regulation of unit-linked insurance products (ULIPs).
Trai, with its in-depth knowledge of telecom sector, is the perfect authority to workout interconnection technicalities, which involves linking telecom networks with that of banks. The points to be sorted out include service charge payable to the telecom provider for mobile banking access and the number of points of interconnection.
Mobile banking confirms to government’s policy of inclusive growth. In rural areas, mobile telephony has made deep penetration to the point that there are more mobile users than bank account holders. This unusual state of affairs can be turned around to the advantage of all concerned by using mobile services to improve access to financial services.
With mobile banking in place, rural folks can withdraw or transfer money using mobile phones. However, concerns regarding vulnerability of carrying out financial transactions through mobile phones still remain, as pointed out by RBI governor D Subbarao recently. He had suggested a bank-led arrangement as a means to avoid cyber crime such as phishing, identity theft and misuse of personal information.
RBI had issued guidelines for mobile banking as early as October 2008 and almost 32 banks have obtained clearance to provide related services. With the approval for mobile banking already in place, the government has set July 31 as an informal date for launch of services.
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