Mobile network operators can't offer cash-out facility: RBI
Mumbai: Reserve Bank deputy governor H R Khan Wednesday said it will not allow mobile network operators to offer cash-out facility under their mobile banking services, but said they can offer such service if they work as business correspondents (BCs) for banks.
"There are issues in permitting cash-out in mobile wallet. Basically, it is an e-money product, so we have to see that mobile network operators (MNOs) do not get to "bypass banking" and that is why we said cash-out will not be permitted. Of course, if it acts as a BC, then at a BC point, cash-out is permitted," Khan told reporters at the Ficci-IBA banking summit.
Cash-out facility, which is permitted in some countries, enables a customer to withdraw money using his mobile wallet and is currently not allowed in the country.
On using mobile banking for cross-border remittances, he said there are issues because of security concerns in the quality of flow, anti-money laundering rules, 'know your customer' (KYC) rules, among others.
Noting that India is one of the four-five countries which are a major target of terrorist activities, Khan said, bank-to-bank remittances model is possible and things are evolving in this space.
On conducting more open market operations (OMOs) to improving liquidity in the system in a tight interest rate regime, Khan said, "We have indicated that if the liquidity goes below 1 per cent plus or minus of net demand and time liabilities (NDTL), we will conduct open market operations".
Banks borrowed Rs 10,355 crore from the LAF window of the RBI on Tuesday. The apex bank will conduct another Rs 16,000 crore OMO on Friday.