RBI amended mobile banking guidelines increased transaction limit

The Reserve Bank of India has relaxed mobile banking guidelines in order to boost it.

Some of the leading telecom companies like Bharti Airtel are active in taking up pilot project for mobile banking.

The mobile number of users is four and a half times the total number of bank accounts in this country, therefore mobile banking is being largely looked at as a good option for providing transfer facility across the length and breadth.

Some of the operative parts of these guidelines which were introduced after the October 2008 circular and have been amended to a large extent are:

Now RBI has increased the daily transaction limit to Rs 50,000 per customer for both funds transfer as well as transactions which involve purchases of goods and services. At present the transactions are limited to Rs 5,000 and 10,000 respectively.

Secondly, RBI has also relaxed the technology and security standards and banks have been permitted to undertake transactions up to Rs 1,000 without end to end encryption. This way in some of the cost of transaction will be reduced.

The remittance of funds for disbursements in cash is the other major feature of the circular. This feature is directly related to facilitating the use of mobile for cash. In India around 90% of the user base has prepaid mobile phones thus the cash transaction is preferred where user puts in money, gets the credit and uses it.

However mobile phone companies are having discussions for extending this facility for direct transfer in case the individual is staying in Delhi and adds Rs 1,000 the money can be delivered somewhere in the hinterland of Bihar or UP

For this RBI has stated that there are separate guidelines for disbursal of these funds. The maximum amount of these transactions will be Rs 5,000 per transaction to which banks are permitted to put a cap on the rapidity of such transactions subject to a maximum of Rs 25,000 per month per customer. The funds can be transferred through both, an agent or an ATM.

As it is not possible to go to ATM easily and the number of ATMs is also less in some of parts of the country, large parts of the country particularly rural and suburban areas do not have access to ATMs. Thus banks can appoint agents for such transfers.

Then some of the agents can be mobile operators, the service providers and the handset resellers in the hinterland.

According to bankers this can help in financial inclusion in a big way. Also, this will take over from retail payment from cash and cheque based transaction to mobile based transaction which will be convenient and will also reduce the cost.

The bankers said these guidelines are mainly focused on metros. If they were able to get hold of this market, it will increase in transactions. Currently in India, transactions through mobiles are of not importance. Therefore these guidelines can boost the overall transactions.

Thus these guidelines are being looked as most important factor and companies like Bharti Airtel among others will be benefited from this proposal giving them reason to cheer.