IMG suggests mobile linked no-frill accounts for rural population in India
India with mobile user base of 65 mn customers may soon witness a mobile linked no-frill banking account for rural population. This can be a major step towards financial inclusion given the fact that banking services penetration in India in rural areas is very low.
Inter Ministerial Group (IMG) in its report to Telecom Regulatory Authority of India (TRAI) has suggested a framework for the same.
The no-frill accounts may have only 5 types of transactions allowed. These include peer to peer fund transfer, cash withdrawal, balance enquiry, cash deposit and credit into no-frills account. The daily cash withdrawal limit suggested is Rs.5,000 per day and Rs.25,000 per month. These account holders are not issued cheque books.
These accounts will not be having minimum quarterly balance condition imposed. "The framework envisages creation of mobile linked no-frills accounts by the banks, which will have various transaction limits," said the Inter Ministerial Group (IMG).
The committee has further suggested that point of transaction for such no-frills account can be at Mobile Banking Points of Sale", through bio-metric based "micro ATMs" of the BCs or their sub-agents. Also there shall be simplified format for know your customer (KYC) information which is needed by RBI for each account holder.
The process of KYC may be further simplified after implementation of UIDAI project under which every citizen of India will get Aadhar card. This card can be used to share information of no-frill account holders for opening account and also for delivery of other financial services.
The step is expected to be useful for TRAI also it will improve the usability of mobiles in rural areas and will offer scope for more value added services in future. This will attract more mobile players to enter into rural areas with better services.
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