The Inter Ministerial Group (IMG) constituted by the Cabinet Secretary in 2009 to suggest ways of improving mobile banking in the country, where only 26 per cent of people have bank accounts, has submitted its recommendation.
The committee has recommended that the cap on daily mobile transaction be increased from the current Rs 2,500 to Rs 5,000. In its recommendation the IMG has suggested a 2 per cent commission per transaction, to be collected from the customer.
Banks, in turn, must pay the telco a minimum of Rs 2.25 per transaction or 1.4 per cent of the total amount which should be gradually reduced to 1 per cent over five years.
If the telco were to set up mini ATMs (retail outlets where people can also withdraw cash) then banks must pay the telco a minimum of Rs 3 per transaction or 2.25 per cent of the amount.
The committee has recommended that telecom operators be allowed to work with different banks in different areas, but that no retail outlet should be allowed to service two different banks.
When mobile banking services are launched, any cell phone customer will be able to create a ‘mobile linked no frills’ account to deposit, withdraw and transfer money. He will execute these transactions through a mobile based m-PIN system or through micro ATMs run by telecom service providers.
At present, only customers who have a bank branch within 30 km of where they live can avail mobile banking facilities. The committee has recommended a relaxation of this norm to allow every one with a mobile connection to benefit from mobile banking.
RBI in its earlier guidelines had allowed banks to employ telecom operators as business correspondents, thus enabling banks to exploit the pre existing, dense telecom retail and wireless network particularly in far flung regions. This move by the RBI led to joint ventures like the recently announced SBI-Airtel and ICICI-Vodafone mobile banking partnerships.
If the recommendation by the Inter Ministerial Group is accepted, it will pave the way for mobile banking to reach each mobile user in the country. With the total number of mobile connections crossing 700 million, mobile banking will bring in millions into banking and will also bring revenue for banks and telecom operators.