Mobile wallets: RBI allows co-operative banks to issue mobile wallets

MUMBAI: The Reserve Bank of India (RBI) has allowed co-operative banks, who are permitted to install ATMs and issue debit cards, to also issue prepaid payment instruments PPIs like mobile wallets.

In a notification issued late on Thursday, RBI laid down strict norms and conditions to be followed by co-operative banks before permitting them to issue wallets for utility bill payments and other activities up to a limit of Rs 10,000.

“It has been decided to permit all licenced co-operative banks having their own ATM network to issue semi-closed PPIs,” RBI said in a statement.

“This is subject to the compliance with eligibility criteria and other guidelines as prescribed by Department of Payment and Settlement Systems (DPSS), RBI from time to time.”

The apex bank also laid down various criteria like banks should be core banking or CBS compliant, with net non-performing assets being less than 3 per cent and also being profitable in the previous financial year.

Further, the RBI has also mandated that the bank should have internal and audit inspection processes both for its branches as well as the head office.

RBI has also mandated that there should be no monetary penalty being imposed on the entity during the last two financial years and the bank should also have a comprehensive customer grievance redressal mechanism.

Commercial banks are allowed to issue mobile wallets like SBI have SBI Buddy, PayZapp from HDFC Bank among others. Customers can use these instruments to pay utility bills like electricity and water, recharge mobile phones and also buy goods and services online.

READ ---  John McCain is back to being John McCain

After RBI permission, now even co-operative banks will be able to compete with their business competitors at the same plank.