The Reserve Bank of India has given a fillip to mobile banking by relaxing the norms for making payments through mobile phones, also known as m-wallet. Whereas, earlier it was possible to store only up to Rs 5000 in m-wallets, now the limit has been enhanced to Rs 50,000.
The RBI notification of May 4, 2011 stated that, "The position has been reviewed keeping in view the need to facilitate larger acceptance of mobile phone based prepaid payment instruments (M-wallets) as a mode of payment."
In the previous guidelines, RBI had stated that the value of individual payment instrument shall not exceed Rs 5000.
According to The Mobile Indian, on an average, 6.8 lakh transactions amounting to Rs 61 crore in a month are settled through the mobile banking channel today.
As the number of cell phone users is many times more than the number of bank accounts, m-wallets can serve the purpose of enhancing the reach of banking to large sections of the country. M-wallets can also facilitate payment of utility bills including water, electricity, telephone, insurance premiums, cooking gas, etc. But the biggest advantage of mobile banking is that it cuts down on cost of providing banking related services to the customers. For telecom companies as well as banks, mobile banking is the surest way to achieve growth.
The RBI notification has also decided to bring semi-closed m-wallets on par with the other semi-closed prepaid instruments. Bharti Airtel and Vodafone have already tied up with SBI and ICICI Bank respectively to offer such facilities to their subscribers. It is also worth noting that RBI's move to relax the m-banking service comes after intense lobbying by telecom service providers and banks.
Recently mobile payment provider Paymate rolled out two financial services for rural users. The first is a mobile remittance initiative and the other is a micro-loan repayment initiatives.