1. Larger base covered: This is a key change. Mobile Banking can now be offered to customers of banks whether or not they have debit or credit cards. As per the earlier guidelines, it appeared that Mobile Banking was restricted only to debit/credit card holders with bank accounts. That’s the difference adding an “or” to section 2.1 has made.
2. Physical verification mandatory, but can be relaxed: In the earlier guideline as per section 3.1, “Banks shall put in place a system of document based registration with mandatory physical presence of their customers, before commencing mobile banking service.” There’s a loophole now, with the addition of the following sentence: “Reserve Bank would consider relaxation in specific cases while approving the proposals of banks.”
Our take: do away with a separate physical verification for mobile banking. Physical verification is done separately for opening a bank account and getting a mobile phone connection. Why a third verification for mobile banking?
3. Inter-operability Remains: this is a tough one. Beyond a period of six months, banks will have to offer the mobile banking service with all mobile operators, should the customer decide to switch operators. This has not been modified in the new guidelines.
Out take: While interoperability is desirable, it effectively puts banks at the mercy of mobile operators. For example, what if, hypothetically, Shyam Telelink does not tie up with ICICI Bank at the end of the six month period? With Airtel or Vodafone customers having signed up, will ICICI Bank have to shut down the services altogether? The interoperability clause, though well meaning, is not practical, and will have to be reviewed.
4. Transaction limit increased, but not enough: Customers are allowed to transfer funds of a maximum of Rs. 5000 daily, and purchase goods or services worth Rs. 2500. The earlier guidelines had imposed a per transaction limit of Rs. 2500, and an overall cap of Rs. 5000 per day, per customer.
Our take: Banks should be allowed to set their own transaction limits, depend on their risk perception of the customer. Why should the rules be any different from those for the Internet?
5. mPin encryption requirement relaxed: the requirement for an end to end encryption of the mobile PIN number (mPIN) has been relaxed. Earlier the end-to-end encryption was mandatory. Now it is just “desirable”.
6. Internet login IDs and Passwords can be used for mobile banking: the previous guidelines forbade the usage of Internet banking logins and IDs for mobile banking, thus making it necessary for users to remember/store both. That clause has now been removed.
Like we mentioned earlier – why should the guidelines for Mobile Banking be any different from those for Internet Banking…Just because the base is larger?
Download the new guidelines here.