RBI Guide­lines on Mo­bile Bank­ing (last up­dated 30 June 2014)

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The guide­lines is­sued by Re­serve Bank of In­dia on ‘Risks and Con­trols in Com­put­ers and Telecom­mu­ni­ca­tions’ vide cir­cu­lar DBS.CO.ITC.BC. 10/ 31.09.001/ 97-98 dated 4 Fe­bru­ary 1998 will ap­ply mu­tatis mu­tan­dis (‘the nec­es­sary changes hav­ing been made’) to mo­bile bank­ing. The guide­lines is­sued by RBI on ‘know your cus­tomer’ (KYC), ‘anti-money laun­der­ing’ (AML) and ‘com­bat­ing the fi­nanc­ing of ter­ror­ism’ (CFT) from time to time will be also ap­pli­ca­ble to mo­bile-based bank­ing ser­vices. Banks should of­fer mo­bile-based bank­ing ser­vice only to their own cus­tomers, be it bank ac­count or credit card ac­count hold­ers. How­ever, for the pur­poses of re­mit­tance of funds for dis­burse­ment in cash, the re­ceipts could be non-ac­count holder also. Banks should have a sys­tem of doc­u­ment-based reg­is­tra­tion with manda­tory phys­i­cal pres­ence of their cus­tomers be­fore com­menc­ing mo­bile-bank­ing ser­vice. There can be two lev­els of mo­bile-based bank­ing ser­vice. The first level is in the na­ture of in­for­ma­tion like bal­ance en­quiry, SMS alert for credit or debit, sta­tus of last five trans­ac­tions, and many other in­for­ma­tion-pro­vid­ing ser­vices. The ac­count-open­ing form, at the time of open­ing new bank ac­count, should clearly in­di­cate the op­tion for ‘mo­bile bank­ing’. The sec­ond or stan­dard level of mo­bile-bank­ing ser­vices could in­volve fi­nan­cial trans­ac­tions such as pay­ments, trans­fers and stop pay­ments. Bank­ing trans­ac­tions up to Rs 5,000 can be fa­cil­i­tated by banks with­out end-to-end en­cryp­tion. Banks are per­mit­ted to of­fer mo­bile-bank­ing fa­cil­ity to their cus­tomers with­out any daily cap for trans­ac­tions in­volv­ing pur­chase of goods/ser­vices. In case of cash-out, the max­i­mum value of such trans­fers shall be Rs 10,000 per trans­ac­tion. Banks may place a suit­able cap on the ve­loc­ity of such trans­ac­tions, sub­ject to a max­i­mum of Rs 25,000 per month per ben­e­fi­ciary. Banks are re­quired to main­tain se­cu­rity and con­fi­den­tial­ity of cus­tomers’ ac­counts since in the mo­bile­bank­ing sce­nario the risk of banks not meet­ing the above obli­ga­tion is high. Banks are re­quired to make manda­tory dis­clo­sures of risks, re­spon­si­bil­i­ties and li­a­bil­i­ties of the cus­tomers on their web­sites and/or through printed ma­te­rial. Banks may carry out due dili­gence of the per­sons be­fore ap­point­ing them as au­tho­rized agents for such ser­vices. Banks shall, how­ever, be re­spon­si­ble as prin­ci­pals for all the acts of omis­sion or com­mis­sion of their agents. The ex­ist­ing mech­a­nism of han­dling cus­tomer com­plaints/griev­ances may be used for mo­bile-bank­ing trans­ac­tions as well. How­ever, in view of the fact that the tech­nol­ogy is rel­a­tively new, banks should set up a help desk and dis­close on their web­sites the de­tails of the help desk and es­ca­la­tion pro­ce­dure for lodg­ing com­plaints. Such de­tails should also be made avail­able to the cus­tomers at the time of sign-up. In cases where the cus­tomer files a com­plaint with the bank dis­put­ing a trans­ac­tion, it will be the re­spon­si­bil­ity of the ser­vice-pro­vid­ing bank to ad­dress the cus­tomer griev­ance. Banks should for­mu­late charge-back pro­ce­dures for ad­dress­ing such cus­tomer griev­ances. The griev­ance-han­dling pro­ce­dure in­clud­ing the com­pen­sa­tion pol­icy should be dis­closed. Cus­tomers’ com­plaints/griev­ances aris­ing out of mo­bile-bank­ing fa­cil­ity will be cov­ered un­der the Bank­ing Om­buds­man Scheme.

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