Mobile phones, as a medium for extending banking services, have attained greater significance because of their ubiquitous nature. The rapid growth of mobile users in India, through wider coverage of mobile phone networks, have made this medium an important platform for extending banking services to every segment of banking clientele in general and the unbanked segment in particular. In order to ensure a level playing field, Reserve Bank of India (RBI) brought out a set of operating guidelines for adoption by banks.
The guidelines, finalised following a wide consultative process with the stakeholders, were first issued in October 2008 and since then have been updated keeping in view the developments taking place.
RBI has, from time to time, issued a number of circulars containing guidelines on Mobile Banking. This Master Circular has been prepared to facilitate the banks and other stakeholders to have all the extant instructions on the subject at one place. The purpose is to provide a consolidated document containing all rules / regulations / procedures prescribed to be followed by banks for operationalising Mobile Banking in India.
Scope of the guidelines is very wide. The guidelines are applicable to all commercial banks (including Regional Rural Banks), Urban Cooperative Banks, State Cooperative Banks and District Central Cooperative Banks.
For the purpose of the instructions contained in this Master Circular, ‘Mobile Banking transaction’ means undertaking banking transactions using mobile phones by bank customers that involve accessing / credit / debit to their accounts.
“Banks are permitted to offer mobile banking services (through SMS, USSD or mobile banking application) after obtaining necessary permission from the Department of Payment & Settlement Systems, Reserve Bank of India. Mobile Banking services are to be made available to bank customers irrespective of the mobile network,” the Master Circular said..
According to the Circular, banks which are licensed, supervised and having physical presence in India, are permitted to offer mobile banking services. Only banks who have implemented core banking solutions are permitted to provide mobile banking services. The services shall be restricted only to customers of banks and/or holders of debit/credit cards issued as per the extant Reserve Bank of India guidelines.
“Only Indian Rupee based domestic services shall be provided. Use of mobile banking services for cross border inward and outward transfers is strictly prohibited. Banks may also use the services of Business Correspondent appointed in compliance with RBI guidelines, for extending this facility to their customers,” it said..
Banks shall put in place a system of registration of customers for mobile banking. Banks should strive to provide options for easy registration for mobile banking services to their customers, through multiple channels, thus minimizing the need for the customer to visit the branch for such services. The time taken between registration of customers for mobile banking services and activation of the service should also be minimal.