wordpress blog stats
Connect with us

Hi, what are you looking for?

RBI Allows PCOs, Grocery Shops To Offer Banking Services, But Not Telcos

In what is a fairly significant move, one clearly aimed at bringing more and more people into the banking system, the Reserve Bank of India has allowed banks to appoint the following entities as banking correspondents:

— Individual kirana (grocery)/medical /fair price shop owners
— Individual Public Call Office (PCO) operators
— Agents of Small Savings schemes of Government of India/Insurance Companies
— Individuals who own Petrol Pumps
— Retired teachers and
— Authorised functionaries of well run Self Help Groups (SHGs) linked to banks.

However, don’t expect every second grocery shop you visit to be a banking correspondent: Banks will have to do the necessary due diligence on the appointed Banking Correspondents. Risk mitigation and complaint resolution is a key factor for the RBI, and they’ve said that will look upon any unfair practices seriously. In that context, they’ve also asked Banks, and not banking correspondents, to collect service charges from customers, in a transparent manner.

From a digital commerce perspective, there are two things to note:

— Firstly, the RBI has also recommended that technology solutions for authentication and security be adopted for minimizing risk. Thats an opportunity for a company like Eko India Financial Services, a CGAP funded project which is a business correspondent for India’s largest public sector bank, State Bank of India. Eko already has a technology supported branchless banking setup, in partnership with Bharti Airtel for network access, which – if they choose to do so – can be provided to banks as a white labeled solution. Eko, at present, has a network of banking service points.

Advertisement. Scroll to continue reading.

— Secondly, it’s notable that telecom operators are not among the entities designated as banking correspondents, despite the fact that they have a distribution network, the wherewithal to do due diligence on retail agents, and network infrastructure for such services. A couple of weeks ago, mobile payments company Paymate had launched a money transfer service with Tata Teleservices, which allowed designated PCO operators to serve as money transfer agents.

While the RBI guidelines are based on bringing more and more people into the banking ecosystem, one wonders whether banks can afford the low ARPU customers. As R Chandrasekhar, Secretary, Department of IT had said a couple of months ago, financial inclusion is difficult unless the need for having a formal bank account is dispensed with.

Linking Mobile, UID & Payments, Without Bank Accounts – R. Chandrashekhar

Written By

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.

Views

News

The DSCI's guidelines are patient-centric and act as a data privacy roadmap for healthcare service providers.

News

In this excerpt from the book, the authors focus on personal data and autocracies. One in particular – Russia.  Autocracies always prioritize information control...

News

By Jai Vipra, Senior Resident Fellow at Vidhi Centre for Legal Policy The use of new technology, including facial recognition technology (FRT) by police...

News

By Stella Joseph, Prakhil Mishra, and Yash Desai The Government of India circulated proposed amendments to the Consumer Protection (E-Commerce) Rules, 2020 (“E-Commerce Rules”) which...

News

By Rahul Rai and Shruti Aji Murali A little less than a year since their release, the Consumer Protection (E-commerce) Rules, 2020 is being amended....

You May Also Like

News

Rajesh Kumar* doesn’t have many enemies in life. But, Uber, for which he drives a cab everyday, is starting to look like one, he...

News

By Aroon Deep and Aditya Chunduru You’re reading it here first: Twitter has complied with government requests to censor 52 tweets that mostly criticised...

Advert

135 job openings in over 60 companies are listed at our free Digital and Mobile Job Board: If you’re looking for a job, or...

News

Google has released a Google Travel Trends Report which states that branded budget hotel search queries grew 179% year over year (YOY) in India, in...

MediaNama is the premier source of information and analysis on Technology Policy in India. More about MediaNama, and contact information, here.

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ

Subscribe to our daily newsletter
Name:*
Your email address:*
*
Please enter all required fields Click to hide
Correct invalid entries Click to hide

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ