Reserve Bank Governor D Subbarao in his speech laid stress on mobile banking to be driven by banks, not telecom operators, in view of money laundering and terror financing threats.

RBI Governor D Subbarao was speaking at a Banking Technology Excellence awards function hosted by the Institute for Development and Research in Banking Technology (IDRBT). He said, "The Reserve Bank has a clear preference for the bank-led model."

He said, "Given the growing concerns about money laundering and financing of terrorism, a bank-led model is decidedly safer and more sustainable," and added, although a mobile operator-led model helps in stepping up financial inclusion.

Subbarao said the central bank also wants to offer more services to the village people besides remittance facility, through financial inclusion program, and this will be possible only through banks.

He added, "We want our customers to get minimum services like deposit insurance, access to affordable credit and the payment system which only banks can offer."

The governor told that the RBI acknowledge that mobile telephony will play an important role in the value chain and that it is interested that mobile service providers collaborate with banks to provide value-added services.

Speaking about the use of technology in banking, he said in his priority list, the main focus is on to keep customer information confidential and fully secured as there is increase in cyber crimes, phishing-related frauds, identity fraud and misuse of customer information.

Subbarao said, "We proposed to set up a working group on information security, electronic banking, technology risk management and tackling of cyber frauds."

He added, also by looking at the statistics about financial inclusion he does not get the true picture of the situation.

He explained, "Even where bank accounts are claimed to have opened, verification has shown that a significant portion of these accounts are dormant. Very few conduct any banking transactions and even fewer receive any credit."

However RBI has instructed all domestic commercial banks, public and private, to prepare their own financial inclusion plans.