Mobile banking, cash at point-of-sales services remain dismal, says RBI

Banks have shown little progress in the areas of mobile banking and cash at point-of-sales (PoS) terminals, even after nearly two years of the Reserve Bank of India (RBI) allowing banks to run such facilities.

Until March, 34 of the 39 banks that were granted approvals for mobile banking, had launched such services. According to RBI estimates, 6.8 lakh such transactions, worth Rs 61 crore, are settled through this channel in a month.

“Mobile banking is growing, but not very significantly. Though the number of users who registered for mobile banking is substantial in absolute numbers, it is very low vis-à-vis the number of mobile phone subscribers,” said G Padmanabhan, chief general manager, RBI. He said even though the central bank had always deliberated over issues related to payments and settlement systems, implementation had been a concern. “Implementation of some of the policy directives, which were emanated largely on the demands of stakeholders, has been far from satisfactory,” he said.

“We were told other than payment numbers, if we could increase the limit, payments on mobile transactions would zoom. We have now increased the limits. Let's see whether or nor that happens, since it took almost one and a half years for the people to conduct the first transaction,” he said. Earlier this month, RBI had raised the limits on mobile-based transactions without end-to-end encryption from Rs 1,000 to Rs 5,000. The limits on mobile-based semi-closed prepaid instruments issued by non-banks were also raised from Rs 5,000 to Rs 50,000.

Padmanabhan also pointed to the dismal performance of the ‘cash at PoS’ facility, which enables customers to withdraw cash at merchant establishments. “It has been nearly two years since RBI permitted 'cash at PoS'. However, barring a few banks and a handful of transactions, nothing much is happening,” he said.

Banks to enable payments via mobile phones in three months
“Banks would roll out the facility (merchant payments through mobile phones) in three months, on a pilot basis,” said A P Hota, managing director and chief executive officer, National Payments Corporation of India. The Reserve Bank of India had, on May 3, allowed banks to allow their customers to make merchant payments through mobile phones. Banks would use the Interbank Mobile Payment Service to launch the service.