A government-appointed committee in India is proposing new mobile-banking guidelines to bring financial services to unbanked and underbanked individuals.
Consumers from areas lacking bank access should be able to open no-frills accounts linked to their mobile phones, according to a report submitted by the Inter Ministerial Group to the Telecom Regulatory Authority of India.
The government’s cabinet secretary in 2009 formed the group, which consists of ministers from across ministries, to look into financial-inclusion opportunities in rural India.
Among the group’s suggestions is that consumers be allowed to withdraw up to 5,000 rupees (US$110 or 81 euros) per day and to make five basic transactions through business correspondents the banks appoint, according to the report. Such transactions could include cash deposits and withdrawals, peer-to-peer funds transfers, balance inquiries, and salary and pension credits under government schemes.
Consumers may initiate the transactions by entering a PIN on special payment terminals or through biometric identification at micro-ATMs carried by business correspondents, the group said.
The Reserve Bank of India also should exempt banks from issuing statements to accountholders to keep the transaction cost low and limit the monthly transaction limit to 25,000 rupees, according to the report. The group also suggests that the country’s 15.5 million post offices be used as business correspondents to provide banking services to rural consumers in conjunction with mobile banking.
Banks in India already issue no-frills accounts in rural India, and in July the Reserve Bank asked rural financial institutions to issue credit cards tied to no-frills banking accounts (
A Reserve Bank spokesperson tells PaymentsSource the report contains only proposed guidelines and that the central bank will review them before establishing new guidelines for mobile banking in the rural areas.
“You can expect a firm set of rules by June this year,” she says.
Representatives from the Inter Ministerial Group could not be reached for comment.
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