RBI asks banks to expand internet, mobile banking reach

Also urges banks to also focus on elderly and pensioners besides urban clientele

The Reserve Bank of India (RBI) has asked commercial banks to expand the reach of internet and mobile banking services.

"We are going through an era of technological revolution," said RBI Deputy Governor H R Khan at a workshop on e-Banking organised by Bank of India here on Thursday. "And mobile and internet penetration is on the rise in the country. Therefore, banks need to formulate strategies to popularize mobile and internet based banking services."

Khan asked banks to also focus on elderly and pensioners besides urban clientele.

"Banks need to focus on new groups besides the obvious youth segment. They can now target pensioners and elderly segment and tell them the benefits of these platforms. It will help banks in expanding their customer base," said Khan.

He also asked banks to come with their own strategies for expanding the reach of m-banking and e-banking. He added, "India still has 13-14 percent Cash to GDP ratio, which is one of the highest in the world. More cash or liquidity means more problems like fake currency, corruption and security concerns. Therefore, we are trying very hard to get it down. In RBI's Payment Vision for 2012-15, our aim is to bring it down by promoting internet and mobile based transactions. We, at RBI, are working very hard for this, but banks also need to come up with their own strategies."

He asked banks to assure people about the safety of these platforms. "Some doubt the safety of these platforms. I want to assure you that India has one of the most secure banking systems in the world. As soon as someone withdraws money from his or her bank account, the bank automatically sends an SMS alert on the registered mobile numbers. Bankers also need to assure people on the personal level," told the deputy governor.