The Reserve Bank of India (RBI) Governor, Raghuram Rajan, on Wednesday, said that the central bank recently approved in-principle the setting up of a payment system which would facilitate fund transfer from bank account-holders to those without accounts through ATMs.
“Cashing out is important for remittances, because we have a large recipient population in the country, most of whom do not have access to formal banking services,” said Dr. Rajan, while delivering the keynote address at the Nasscom India Leadership Forum, here, on ‘Financial inclusion: technology, institutions and policies’.
“Essentially, the sender can have the money withdrawn from his account through an ATM transaction.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 Dr. Rajan.
“The system will take care of necessary safeguards of customer identification, transaction validation, velocity checks etc. We need more such innovative products, some of which mobile companies are providing,” he added.
He said that there was a great opportunity for banks and telecom service providers to come together to deliver mobile banking services of all kinds in a seamless and secure manner to their customers. “In the next few months, “we will accelerate the dialogue between key players.”
Technology can also be used to facilitate credit.
“One of the difficulties the poor and small businesses have in accessing credit is the lack of information about them,” said Dr. Rajan.
