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Not Enthused By Lack Of Activity In Mobile Banking, Prepaid – Deputy Governor, RBI

Dr. K.C. Chakrabarty, Deputy Governor, Reserve Bank of India, at India Telecom 2009, was severely critical of the lack of uptake in mobile banking in India. "There is tremendous scope, and enough guidelines have been issued. But we are not encouraged or enthused: one year has passed since the issuance of Mobile Banking guidelines in India. 32 banks have been given approvals to provide mobile banking in India, and of these 21 banks have started providind these services. Yet we haven't seen much activity in this area. Transaction volumes are very low." Dr. Chakrabarty also expressed his surprise at the lack of applications for prepaid payment instruments (like Itz Cash Card, Done Card etc) from mobile operators, saying that "only one mobile service provider has applied for approval to provide such services. " The reason for the surprise? According to him, the change in guidelines, which permit all non-bank entities to provide mobile based prepaid payment instruments, was mandated following representations from the COAI (Cellular Operators Association of India). "Are we to conclude that any model that does not provide a financial float does not interest Mobile Service Providers? It will have to be recognized that Mobile Service Provider led model cannot also permit them to enjoy the float funds. These funds remaining with non-banks are tantamount to deposit taking which needs to be discouraged." Key points from his speech -- Importance of speedy, qualitative delivery of services: Dr. Chakrabarty pointed out that, traditionally, the delivery of financial services is…

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Founder @ MediaNama. TED Fellow. Asia21 Fellow @ Asia Society. Co-founder SaveTheInternet.in and Internet Freedom Foundation. Advisory board @ CyberBRICS

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.

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