Payment technology, Regulatory changes

Reserve Bank of India considers rule changes to promote financial inclusion

Reserve Bank of IndiaThe Reserve Bank of India recently released a report outlining recommended changes to the country’s banking system to promote financial inclusion in India, in which the adoption of mobile payments has been hindered by regulation.

The report—released by the Committee on Comprehensive Financial Services for Small Businesses and Low Income Households, which is chaired by Nachiket Mor—recommended the licensing of a set of payments banks that would be licensed to provide payment services and deposit products to small businesses and low-income households.

The mobile payments industry has seen significant success in developing countries. According to the Indian government, in 2011, India had nearly one billion mobile phone users.

The Indian government has sought to promote financial inclusion by tapping into the widespread use of mobile phones, but adoption of mobile payment technologies has been slow due to rules that require mobile operators to partner with banks, the Financial Times reports.

Under the RBI recommendations, mobile operators could be licensed to provide payment services and deposit products to small businesses and low-income households, with an $807 per customer balance maximum.

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