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People without a bank account in India
would soon be able to withdraw cash from
an automated teller machine (ATM) with
the use of mobile technology, Reserve
Bank of India Governor Raghuram Rajan
announced here Wednesday.
At present, only bank account holders can
withdraw cash from an ATM.
"We have recently approved the in-
principle setting up of a payment system
which will facilitate the funds transfer
from bank account holders to those
without accounts through ATMs," Rajan
said while speaking at the NASSCOM
India Leadership Forum on financial
inclusion and technology.
"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money withdrawn from his account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. The
system will take care of necessary
safeguards of customer identification,
transaction validation, velocity checks
etc.," Rajan said.
"We need more such innovative products,"
he added.
The RBI governor said cashing out is
important for remittances, because the
country has a large recipient population,
most of whom do not have access to
formal banking services.
"The key to cheap and universal payments
and remittances will be if we can find a
safe way to allow funds to be freely
transferred between bank accounts and
mobile wallets, as well as cashed out of
mobile wallets, through a much larger and
ubiquitous network of business
correspondents," he said.
The Nachiket Mor Committee suggests the
creation of Payment Banks as a step
towards this goal. Other suggestions
include interoperable business
correspondents who will get the scale
economies to serve in remote locations,
and the usage of NBFCs as banking
correspondents.
"We will examine all this," Rajan said.
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