kesav 127 Report post Posted June 23, 2010 New Delhi In an attempt to ensure a smooth rollout of mobile banking in the country, the Telecom Regulatory Authority of India (Trai) and the Reserve Bank of India (RBI) have reached an understanding on its regulation. Early rollout of mobile banking will speed up the government’s plans towards financial inclusion. Trai will deal with all interconnection issues while RBI will look into banking aspects like the maximum amount of transaction per day, know-your-customer guidelines and verification criteria, official sources told FE. The development comes as a relief for telecom operators who feared getting caught in a possible regulatory crossfire despite their excitement about the prospects for mobile banking. Such fears had gained currency following the recent fracas between capital market regulator Sebi and the Insurance Regulatory and Development Authority over regulating unit-linked insurance products. Late last week, the government had to resolve this by promulgating an ordinance in favour of Irda. Interconnection is an important aspect in mobile banking since telecom networks would need to connect with bank networks. Charges payable on these counts and the number of points of interconnection need to be worked out in a manner which leaves no room for dispute. Trai has been mandated with this exercise since it has the required expertise in the area. Trai will also be in charge of setting tariffs which consumers would pay for mobile banking access. “The areas of work have been neatly divided between the two regulators and we will work with perfect coordination,” an official involved in the process said. Mobile banking pro-mises new revenue streams for telecom operators, at the same time expanding banks’ reach in rural areas where mobile telephony has made giant strides. Today, there are more mobile users in rural areas than bank account holders, leading to a situation where people have better access to telecommunications and less to financial services . The scope of mobile banking can be gauged from the fact that every year, around Rs 25,000 crore is transacted on the network of the country’s largest mobile operator Bharti Airtel alone, by way of recharge coupons. Once mobile banking takes off, people will be able to withdraw cash and transfer funds using their mobile phones. The government has already approved the framework for introduction of such facilities by the banks. In fact, banks have been advised to start mobile banking services in rural areas by July 31, and complete the rollout by the end of next year. This happened after the government accepted the report of an inter-ministerial group led by a committee of secretaries. The group was chaired by the secretary, department of information technology and had representatives from the departments of financial services, post, rural development, Planning Commission, UID Authority, Trai, RBI, department of telecom and the home ministry. The mobile banking model envisioned for rural areas will enable mobile phone users to deposit and draw cash instantly into or from their mobile-linked no-frills bank accounts through a business correspondent having a mobile phone in the village. A significant feature of the proposed framework is that funds remain within the banking system throughout and the intermediary does not have custody of the funds even momentarily. source :: http://www.expressindia.com/latest-news/Trai--RBI-agree-on-roles-in-rollout-of-m-banking/636301/ A very good move by India's top 2 regulators :clap: :clap: Share this post Link to post Share on other sites
