Mobile Banking In India Still Not Popular Says RBI

Electronic banking in India is still at the infancy stage. Whether it is electronic banking, Internet banking, mobile banking or any other form of e-banking, Indian banks have yet to take the lead. Further, in the context of mobile banking, mobile security in India is also emerging as a roadblock. This has also made mobile banking in India risky. Absence of encryption laws in India has further made the mobile security very weak in India.

Recently, G Gopalakrishna, the executive director of Reserve Bank of India (RBI) said that all Banks would have to create a position of Chief Information Officers (CIOs) as well as Steering Committees on Information Security at the Board Level at the earliest. The idea is to use information technology to the maximum possible extent while maintaining the cyber security of banks.

However, banks in India are shying away from using technology assisted banking. Indian banks have shown little progress in the areas of mobile banking and cash at point-of-sales (PoS) terminals, even after nearly two years of the RBI allowing banks to run such facilities.

According to G. Padmanabhan, chief general manager, RBI, though the number of users who registered for mobile banking is substantial in absolute numbers, it is very low vis-à-vis the number of mobile phone subscribers. Implementation of some of the policy directives, which were emanated largely on the demands of stakeholders, has been far from satisfactory, he said.

Earlier this month, RBI had raised the limits on mobile-based transactions without end-to-end encryption from Rs 1,000 to Rs 5,000. The limits on mobile-based semi-closed prepaid instruments issued by non-banks were also raised from Rs 5,000 to Rs 50,000.

RBI has been taking many pro active reforms for the banking sector of India. RBI is not only ensuring strict compliance with various laws, regulations and norms but is also prescribing various policies and strategies for effective and secure banking in India. Further, deviant behaviour of banks is also punished by RBI from time to time. It seems RBI needs to be stricter regarding implementation of its policies and recommendations.