RBI rules out allowing mobile wallet facility by MNOs

Mumbai, Sept 5: Reserve Bank deputy governor HR Khan today ruled out allowing mobile network operators from offering cash-out or mobile wallet facility unless they convert their services as

business correspondents.

"We don't want to permit cash-out facility by the mobile network operators (MNOs). We are very clear that they should not bypass the banking regulations. However, mobile wallet facility can be given to them if they work as business correspondents of banks," Khan told reporters, at the second day of the Ficci-IBA banking summit here.

On using mobile banking for cross-border remittances, he said there are issues because of security concerns in the quality of flow, anti-money laundering rules, know your customer (KYC) rules, among others.

Noting that India is one of the four-five countries which are a major target of terrorist activities, he said, bank to bank-led remittances model is possible and things are evolving in this space.

On conducting more open market operations (OMOs) to improve liquidity in the system in a tight interest rate regime, Khan said, "We have indicated that if the liquidity goes below one percent plus or minus of net demand and time liabilities (NDTL), we will conduct open market operations."

Bank borrowed Rs 10,355 crore from the LAF window of the RBI yesterday. The apex bank will conduct another Rs 16,000 crore OMO on Friday.

PTI