RBI removes Limits on Mobile Banking Transactions

The Reserve Bank of India yesterday removed the ceiling of Rs. 50,000 per customer per day mandated in 2009 under the guidelines on mobile banking. Banks are now free to place per transaction limits based on their own risk perception with the approval of its Board.

The first guidelines on mobile banking transactions in India, issued by the Reserve Bank in October 2008 placed certain monetary restrictions on the fund transfer transaction through this medium, as the mobile technology at that time was relatively new. These monetary restrictions were then relaxed in December 2009 based on request from banks and the need to give impetus to mobile banking in the country.

Banks are increasingly extending mobile banking facilities (financial) to their customers. As on date, the Reserve Bank has approved 52 banks for extending the service. Total transactions effected through mobile banking in 2010-11 were 9.60 million (value – ` 7806.48 million) as compared to that of 2009-10 was 2.32 million (value – ` 1915.78 million) – an increase of more than 300 per cent in terms of volume and value. Interbank Mobile Payment Service (IMPS) developed and operated by National Payments Corporation of India (NPCI) has also enabled real time transfer of funds through the medium of mobile phone between accounts in different banks.

Keeping in line with the developments in mobile technology, increasing sophistication of mobile access devices, increase in options for remote connectivity and mobile application security, the distinction between various channels are becoming blurred. The Reserve Bank has not prescribed any limit on account to account fund transfers through other channels, such as, internet banking.

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Notification to give effect to above is as follows:-

RBI/2011 -12/312
DPSS.CO.PD.No. 1098 / 02.23.02 / 2011-12

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December 22, 2011

The Chairman and Managing Director / Chief Executive Officers
All Scheduled Commercial Banks including RRBs /
Urban Co-operative Banks / State Co-operative Banks /
District Central Co-operative Banks

Madam/ Dear Sir

Mobile Banking Transactions in India – Operative Guidelines for Banks

A reference is invited to the guidelines appended to our circular no. RBI / 2008-09 / 208, DPSS.CO.No.619 / 02.23.02 / 2008-09 dated October 08, 2008, followed by directions issued vide circulars RBI / 2009-10 / 273, DPSS.CO.No.1357 / 02.23.02 / 2009-10 dated December 24, 2009 and RBI/2010-11/511, DPSS.CO.No.2502 / 02.23.02 / 2010-11 dated May 4, 2011 on the captioned subject.

2. Banks are increasingly extending mobile banking facilities (financial) to their customers. Interbank Mobile Payment Service (IMPS) developed and operated by National Payment Corporation of India (NPCI) has also enabled real time transfer of funds through the medium of the mobile phone between accounts in different banks.  The volume and value of mobile banking transactions is also showing an uptrend.

3. In terms of Para 2.1 of our circular dated December 24, 2009, a transaction limit of Rs. 50,000/- per customer per day had been mandated. On a review it has been decided to remove this cap. However, banks may place per transaction limits based on their own risk perception with the approval of its Board.

4. It is also clarified that the directions under Para 3 “Remittance of funds for disbursement in cash” of our circular dated December 24, 2009 stands superseded with the directions contained in  our circular RBI / 2011-12 / 213 DPSS. PD. CO. No. 622 / 02.27.019 / 2011-2012 dated October 05, 2011.

5. All other provisions of the extant guidelines on mobile banking remain unchanged.

6. The directive is issued under Section 18 of Payment and Settlement Systems Act, 2007, (Act 51 of 2007) and shall come into force from the date of this circular.

Yours faithfully,

(Vijay Chugh)
Chief General Manager

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