B L February 13, 2014
“We have recently approved the in-principle setting up of a payment system which will facilitate the funds transfer from bank accountholders to those without accounts through ATMs. Essentially, the sender can have the money withdrawn from his account through an ATM transaction.
“The intermediary processes the payment, and sends a code to the recipient on his mobile that allows him to withdraw the money from any nearby bank’s ATM,” said Rajan.
The system will put in place necessary safeguards, including customer identification, transaction validation, and velocity checks. Currently, only bank accountholders can withdraw cash from an ATM.
According to the RBI chief, “Cashing out is very important for remittances because we have a large recipient population in the country most of whom do not have formal access to financial services. They do not have a bank account.”
“The point is that this system is efficient, fast and reaches people… We need more such innovative products, some of which mobile companies are providing,” Rajan added.
Payments Bank
The Governor also said the feasibility of a standalone payments bank, one of the banking structures envisaged by the Nachiket Mor committee, will be examined by the RBI. However, at this point, there is no decision (made) to move forward, he added.
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