Trai,RBI agree on roles in rollout of mobile banking

The Trai will deal with all interconnection issues while RBI will look into banking aspects

In an attempt to ensure a smooth rollout of mobile banking in the country,the Telecom Regulatory Authority of India (Trai) and the Reserve Bank of India (RBI) have reached an understanding on its regulation. Early rollout of mobile banking will speed up the governments plans towards financial inclusion.

Trai will deal with all interconnection issues while RBI will look into banking aspects like the maximum amount of transaction per day,know-your-customer guidelines and verification criteria,official sources told FE.

The development comes as a relief for telecom operators who feared getting caught in a possible regulatory crossfire despite their excitement about the prospects for mobile banking. Such fears had gained currency following the recent fracas between capital market regulator Sebi and the Insurance Regulatory and Development Authority over regulating unit-linked insurance products. Late last week,the government had to resolve this by promulgating an ordinance in favour of Irda.

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Interconnection is an important aspect in mobile banking since telecom networks would need to connect with bank networks. Charges payable on these counts and the number of points of interconnection need to be worked out in a manner which leaves no room for dispute. Trai has been mandated with this exercise since it has the required expertise in the area.

Trai will also be in charge of setting tariffs which consumers would pay for mobile banking access. The areas of work have been neatly divided between the two regulators and we will work with perfect coordination, an official involved in the process said.

Mobile banking pro-mises new revenue streams for telecom operators,at the same time expanding banks reach in rural areas where mobile telephony has made giant strides. Today,there are more mobile users in rural areas than bank account holders,leading to a situation where people have better access to telecommunications and less to financial services.

The scope of mobile banking can be gauged from the fact that every year,around Rs 25,000 crore is transacted on the network of the countrys largest mobile operator Bharti Airtel alone,by way of recharge coupons. Once mobile banking takes off,people will be able to withdraw cash and transfer funds using their mobile phones.

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The government has already approved the framework for introduction of such facilities by the banks. In fact,banks have been advised to start mobile banking services in rural areas by July 31,and complete the rollout by the end of next year. FE