September 20, 2008 2:11:26 am
Bank customers may soon not need to log on to the Internet or visit branches. Using their mobile phones, customers will be able to do most of their banking, thus saving time and money.
With the Reserve Bank of India (RBI) coming out with the operative guidelines for mobile banking transactions, bank customers in India would soon be able to transfer funds from an account in one bank to any other account in the same or any other bank on real time basis, irrespective of the mobile network a customer has subscribed to.
According to the RBI, a transaction limit of Rs 2,500 should be imposed per mobile banking transaction. This is subject to an overall cap of Rs 5,000 per day, per customer, it said. Banks may also put in place monthly transaction limits depending on the bank’s own risk perception of the customer.
“Banks are required to put in place appropriate risk mitigation measures like transaction limit (per transaction, daily, weekly, monthly), transaction velocity limit, fraud checks, AML checks etc, depending on the bank’s own risk perception, unless otherwise mandated by the Reserve Bank,” it said.
The RBI said banks should put in place a system of document-based registration with mandatory physical presence of their customers, before commencing mobile banking service.
Fund transfers would require inter-operability between mobile banking service providers and banks and development of a host of message formats. To ensure inter-operability between banks, and between their mobile banking service providers banks should adopt the message formats like ISO 8583, with suitable modification to address specific needs, it said.
To meet the objective of a nation-wide mobile banking framework, facilitating inter-bank settlement, a robust clearing and settlement infrastructure operating on a 24×7 basis would be necessary. Pending creation of such a national infrastructure, banks may enter into bilateral or multilateral arrangement for inter-bank settlements, with express permission from Reserve Bank, wherever necessary, the RBI said.
In order to protect sensitive customer data, and ensure that security and integrity of transactions are protected, it is necessary that mobile banking servers at the bank’s end or at the mobile banking service provider’s end, if any, should be certified by an accredited external agency, the RBI said. In addition, banks should conduct regular information security audits on the mobile banking systems to ensure complete security.
All mobile banking shall be permitted only by validation through a two-factor authentication. “One of the factors of authentication should be mPIN or any higher standard,” it said.
1 Transfer funds from an account in one bank to any other account in the same or any other bank on real time basis, irrespective of the mobile network
2 Transaction limit of Rs 2,500 per mobile banking transaction subject to an overall cap of Rs 5,000 per day, per customer
3 Banks may decide on monthly transaction limits depending on its own risk perception of the customer.
4 To ensure inter-operability between banks and mobile banking service providers, banks should adopt message formats like ISO 8583, with suitable modification to address specific needs
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