News: RBI keen on mobile banking

(BL 23/10/2006) Hyderabad - Banking transactions through mobile phones could soon become a reality, going by Reserve Bank of India plans.

RBI Governor Dr Y.V. Reddy has said that experiments are currently on at the Institute for Development and Research in Banking Technology (IDRBT) on using mobile telephony technology for banking transactions.

He was speaking to newspersons on the sidelines of the `International Seminar on Payment and Settlement Systems' organised by the Bank for International Settlements (BIS), Switzerland in association with RBI and IDRBT.

According to him, technology - mobile technology in particular - helps in bringing the masses into the overall financial system and in ensuring easy financial inclusion.

Mobile telephony makes the financial transactions quicker, safer and cheaper, he added.

However, he was quick to add that the RBI would consider using mobile technology for financial transactions provided there are adequate safeguards.

"We have to make sure that there are enough safeguards. We have to check its feasibility, the security and safeguards, including the know-your-customer norms."

Earlier, addressing the bankers, he said that one of the recent technological advances that had a significant positive impact on the payment systems related to chip-based processing. The integration of smart cards with mobile phones holds exciting promises for the future.

"Perhaps the payment and settlement chain may soon witness a sea change with the bank account transaction being initiated through a mobile phone, followed, within a few seconds, by the inter-bank settlement effected in Central bank money. If and when that happens, the benefits would accrue to all concerned."