With interoperability of Pre-Paid Instruments, limit hike, your mobile wallet would function as a bank

By: |
April 09, 2021 6:58 PM

Soon you may not even need your bank's mobile banking app or net banking account to transfer money and to do many other banking activities.

Reserve Bank of India, RBI, RBI Monetary Policy, money transfer, mobile wallets, mobile banking, net banking, NEFT, RTGSThe fast-evolving digital payments segment in India, propelled by policy framework and technology penetration, is likely to grow at a CAGR of 27 per cent during the FY20-25 period.

Recently, promoting its mobile banking app that offers almost all the banking services, a leading private sector bank named individual customers as its bank branches. However, soon you may not even need your bank’s mobile banking app or net banking account to transfer money and to do many other banking activities as the Reserve Bank of India (RBI) has decided to make full-KYC Prepaid Payment Instruments (PPIs) mandatorily interoperable and to increase their maximum balance from Rs 1 lakh to Rs 2 lakh.

“The RBI’s proposal to increase the maximum balance of full-KYC Prepaid Payment Instruments (PPIs) to Rs 2 lakh per customer per day and make them mandatorily interoperable would help in deepening financial inclusion and meet the growing banking needs of payment banks account holders,” said Naveen Kukreja – CEO& Co-founder, Paisabazaar.com.

To facilitate the adoption of digital payment systems, apart from increasing the maximum balance per customer for payments banks to Rs 2 lakh per individual from Rs 1 lakh earlier, the RBI has also allowed RTGS and NEFT connectivity with non-bank payment system operators, facilitating UPI interoperability.

“This is in line with a global trend towards opening up of payments rails. It will be interesting to see the instructions which will be issued separately,” said Vijay Mani, Partner, Deloitte India.

RBI Policy: How the key changes will make digital payment, money transfer easier

Welcoming the move, the Payments Council of India (PCI), the largest industry body for digital payments ecosystem in India said that the RBI decision will further increase the penetration of digital payments in the country specially the Tier-3 to Tier-6 centres.

As most people in India today are equipped with mobiles and use mobile wallets, the PCI sees it as a huge step taken towards digitalisation and financial inclusion by the RBI.

The industry body hopes that the new regulations would help a lot of people especially in remote rural areas avail banking services through their phones and existing wallets with ease.

So, the mobile wallets would function as banks soon, provided the necessary safety measures are taken properly.

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