Reserve Bank of India (RBI) governor Raghuram Rajan has said that apex bank is working on a proposal to launch a payment system that will allow the citizens having no bank accounts to withdraw cash from ATMs, using feature phones.
The RBI chief has also hinted at a Nasscom conference that some mobile operators have already started working towards this objective. However, he did not make it clear when the new system will come into effect.
Here is how it works: This system would allow bank account holders to transfer money to friends or relatives who hold no accounts. Here, the sender can go to an ATM of a participating bank and ask the amount to be withdrawn. The machine then processes the payment and sends a code to the recipient's mobile number who can then key-in the code and withdraw money from the ATM of the bank.
"The point is that this system is efficient, fast and reaches people who are unreached at this point and takes care of necessary safeguards such as customer identification, transaction validation, velocity checks, etc. We need more such innovative products," Rajan said.
Last October, RBI had appointed a technical committee, comprising senior executives predominantly from the banking and mobile sectors, to examine the feasibility of implementing a SMS-based funds transfer service using an app that can support any type of mobile handsets, including feature phones. RBI hopes that once implemented, the new service will help promote mobile banking in the country.
(Edited by Joby Puthuparampil Johnson)