Reserve Bank of India prefers bank-led mobile-banking

For mobile banking, the Reserve Bank of India (RBI) prefers the bank-led model over the mobile operator-led one, as it offers facilities such as deposit insurance, access to affordable credit and payment system, not just remittance, governor D Subbarao said.

The growing concerns about money laundering and financing of terrorism is also a reason the central bank favours a bank-led model, he said.

“World over, there are two distinct models - the ‘bank-led’ model and the ‘mobile operator-led’ model. The RBI has a clear preference for the bank-led model,” Subbarao said while addressing a banking event in Hyderabad on Friday.

On interoperability of technological solutions, the governor said the priority clearly has to be to facilitate ‘inclusion’ first. ‘Interoperability’ is no doubt important but it can follow. Clearly inclusion cannot wait for interoperability to happen.”

Subbarao also expressed concerns over the tech barrier between banks and customers as the absence of human touch can be intimidating for those just entering the banking network. He asked banks to take extra care to ensure poor are not scared away by technology.
NW18