Considering that use of the mobile technology in banking industry is relatively new and due care needs to be taken on security of financial transactions the Reserve Bank of India has said there is an urgent need for a set of operating guidelines that can be adopted by banks.
As a first step towards building a mobile payment framework in India, the central bank has issued draft guidelines that are meant only for banking customers ? within the same bank and across the banks. It would be the responsibility of the banks offering mobile payment service to ensure compliance to these guidelines.
RBI said only such banks which are licensed and supervised in India and have a physical presence in India will be permitted to offer mobile payment services to residents of India. The services should be restricted to only to bank accounts/ credit card accounts in India which are KYC/AML compliant. Only Indian Rupee based services should be provided. Banks may use the services of Business Correspondents for extending this facility, to their customers. The guidelines with regard to use of business correspondent would be as per the RBI circular on business correspondents issued from time to time.
The guidelines issued by RBI on ?Risks and Controls in Computers and Telecommunications? will equally apply to Mobile payments, since mobile devices used for this purpose have embedded computing and communication capabilities.
The RBI guidelines on ?Know Your Customer (KYC)? and ?Anti Money Laundering? as prescribed by RBI from time to time would be would be applicable to customers opting for mobile based banking service.
The RBI further said banks should offer mobile based banking service only to their own customers.Banks should have a system of registration before commencing mobile based payment service to a customer. There can be two levels of mobile based banking service – the first or basic level in the nature of information like balance enquiry, SMS alert for credit or debit, status of last five transactions, and many other information providing services and the second or standard level in the nature of financial transactions such as payments, transfers and stop payments. The risk associated with the basic level of information services is much less compared to the standard level of actual payment services.
Prior registration of the customers would be necessary irrespective of the type of service requested. For the standard level service one time registration should be done through a signed document, said RBI.