International Law

Mobile Banking - India?s Central Bank Wakes Up

By admin

Some mandarins at the RBI finally woke up to the reality of mobile banking in India. In June 2008, India’s central bank unveiled draft operating guidelines for banks to observe in connection with financial transaction and information services provided to customers via mobile phones. A month later the RBI issued a neat little circular asking banks to put their mobile services on hold. Loving Soviet-era language…

“it is observed that a few banks have already started offering mobile payment services to their customers without waiting for the release of RBI’s Guidelines”.

Clearly they wanted everyone to wait before they figured out where they figured. That’s understandable. So we waited anxiously for their final carefully crafted guidelines. Well what we did get was a revised draft of the guidelines with some amazing changes after months of deliberations:

• They’ve decided they want to regulate “mobile banking transactions” and not “mobile payments”.
• imposed a per transaction limit of INR 2500 and daily limit of INR 5000
• now require prior approval of the RBI before a bank provides mobile banking services

Yup. That’s it. Those are the sum and substance of the extensive revisions to the draft operating guidelines. That’s why they asked banks to put their mobile banking services on hold all these months.

Download a redline if you’d like to review the revisions.

Full post as published by Technology Law India on September 25, 2008 (boomark / email).