IMG unveils mobile banking framework; pegs withdrawal at Rs 5K

New Delhi, Jan 14 (PTI) People in areas that do not haveaccess to banks should be able to open accounts linked totheir cellphones and be allowed withdrawals of up to Rs 5,000a day, according to a mobile banking framework presented todayby a government committee.

"The framework envisages creation of Mobile linkedNo-Frills Accounts by the Banks, which will have varioustransaction limits," said the Inter Ministerial Group (IMG) inits report to Telecom Regulatory Authority of India (Trai).

Under the framework, a person with mobile-linked accountwill be allowed to undertake five basic transactions throughbanking correspondents (BCs) or their sub-agents appointed bybanks.

IMG, constituted by Cabinet Secretary in 2009, hassuggested that 1.55 lakh post offices across the countryshould be used to provide banking services with the help ofcellphones to people in rural areas.

As mobile banking is in the nascent stages in thecountry, the IMG framework aims at comprehensive set of rulesand providing greater regulatory clarity.

The report assumes significance considering the growingnumber of mobile subscribers among the rural population andthe disadvantaged sections. India has around 65 crore mobilephone subscribers, with many of them in unbanked areas.

IMG has suggested that people can keep money in theirno-frills accounts, where there is no requirement of minimumdeposit. Such account holders are not issued any chequebooks.

The framework has suggested that the Reserve Bank shouldexempt banks from issuing passbooks or statements to accountholders to keep the transaction cost at the minimum.

The ceiling for withdrawal of money from such accountshas been suggested at Rs 5,000 per day and Rs 25,000 permonth.

With mobile subscribers in rural areas far outstrippingbank account holders, a large section of rural population nowhas access to mobile telephony but not to financial services.

The five basic financial transactions on such accounts(cash deposit, credit customer''s mobile linked no-frillsaccount, cash withdrawal, peer to peer transfer and balanceinquiry) can be executed through a mobile based PIN system.

Transactions can be done through "Mobile Banking Pointsof Sale" or through bio-metric based "micro ATMs" of the BCsor their sub-agents, the report said.

IMG has identified different stakeholders in theframework and has defined their roles. .