RBI: Lack of Bank, Telecom Cooperation Holding Back Mobile Banking in India (Jan. 6, 2014)
The uptake of mobile banking in India has been hampered by a lack of cooperation between banks and telecoms, among other issues, according to a report by the Reserve Bank of India (RBI). In the central bank’s most recent semi-annual “Financial Stability Report,” the RBI said though “the mobile banking channel has the potential to be one of the key tools for achieving financial inclusion,” the growth and acceptance of mobile banking in the country has been “below expectation.” Among the factors cited by RBI as holding back mobile banking were low levels of acceptance and awareness of mobile banking products and technology, compatibility issues with available mobile handsets, problems linking mobile numbers with account numbers, and an absence of collaboration and revenue-sharing models between banks and MNOs.
India has adopted a bank-led model for engendering mobile banking, according to the RBI, with only banks licensed and supervised in India and having a physical presence there permitted to offer mobile banking with RBI’s approval. As of the end of 2013, 78 banks in the nation had been granted permission to offer mobile banking. The central bank has been encouraging the growth of electronic payments—including mobile—for the past several years in India, where cash remains the dominant form of payment.