The Reserve Bank of India (RBI) has ruled out extending the cash-out or `mobile wallet' facility for mobile phone operators in the absence of uniform standards, common set of regulations and supervision worldwide and the more important security in transactions.
Speaking at the FICCI-IBA Banking Conference, RBI deputy governor H R Khan today, however, said mobile network operators could be allowed to offer cash-out or mobile wallet facility once they convert their services as banking business correspondents.
"We don't want to permit cash-out facility by the mobile network operators (MNOs). We are very clear that they should not bypass the banking regulations. However, mobile wallet facility can be given to them if they work as business correspondents of banks," Khan said.
Unlike transactions done through mobile phones of farmers and vendors registered with bank and thrift savings plans (TSPs), non-bank-led model is also not suitable for remittances of products identified under financial inclusion, khan pointed out.
Products meant for financial inclusion, he said, cannot be offered through non-bank transactions that are successful only in a few countries, due to presence of a monopoly operator, very poor banking infrastructure and availability of a national identification number, he said.
And, for using mobile banking for cross-border remittances, he said, there are issues of security concerns, anti-money laundering rules and 'know-your-customer' (KYC) rules, that have to be taken care of.