The RBI has reiterated that it won't allow telecom operators offering mobile wallets to offer cash-out facility, unless they sign up customers under a Banking Correspondent tie-up, reports PTI (via DailyBhaskar). Speaking at the FICCI-IBA banking summit, HR Khan, Deputy Governor of the Reserve Bank of India, said that mobile operators can't bypass banking, and can't be permitted to offer cash cash-out, unless they act as banking correspondents (BCs), in which case they can use BC points for it. He also said that cross-border remittances can not be allowed via mobile banking because of security concerns and anti-money laundering rules and Know your customer guidelines. What this essentially means is that telcos and payment companies offering mobile wallets would not be able to offer customers cash withdrawals unless they tie-up with a Bank and verify customers' KYC documents, and will only be able to load cash in the wallet, utilizing it for merchant payments. While we do agree that offering cash out will allow telcos to get a backdoor entry in banking, we feel that the possibility could have been explored at least in regions where there's a large unbanked/underbanked population. Mobile Wallets Presently, Airtel offers a semi-closed mobile wallet service which allows Airtel customers to pay utility bills, recharge their phones, shop at merchant outlets and make online transactions using their mobile phones. It also allows users to make instant money transfers between one Airtel money wallet to another and to bank accounts across the country. Airtel claims that…
