The Reserve Bank of India (RBI) on recently indicated that it would like to bring in a system under which a credit card holder is not liable for transactions done fraudulently using his card.
Zero Liability Policy..!
Speaking at a the launch of the mobile banking facilities of TMB (Tamilnad Mercantile Bank), Mr G. Padmanabhan, Executive Director, RBI, posed a question as to whether it the time was not ripe “to implement a zero liability policy”.
While leaving it to the industry to debate and discuss the issue, Mr. Padmanabhan compared the situation as obtains in India and the developed world, and noted that countries such as the US have adopted a ‘zero liability policy'. However, in India, the liability is on the customers.
Generally the credit card issuers are not liable for fraudulent transactions unless the customer reports the unauthorised transactions immediately. So the shift in liability from customers to banks comes into effect only after the customer informs the bank.
Banks argue that they take adequate steps to ensure safety of card transactions, and the least they expect from the customer is to report the card loss immediately.
While “this is understandable and logical” a consequence of this is that if a customer has adhered to all the risk measures prescribed by the bank, but yet unauthorised transactions have taken place in his/her account, “should the responsibility then not be with the card issuing bank?”
Mobile banking..!
Observing the huge mobile phone penetration in India, which is more than the penetration of banking services, Mr Padmanabhan asked if it was not time for banks to embrace mobile banking.
Mr Padmanabhan said,"In October 2011, 22.45 lakh transactions worth Rs. 161 crore happened over mobile phones. Close to 1 Crore customers have registered themselves for mobile banking. Yet, these numbers are “a drop in the ocean.What this means is that banks have not really made a significant penetration even amongst their existing customers to extend mobile banking services. Often questions such as ‘who owns the customer?' and ‘who controls the transaction' keep cropping up."
He also said, “Has there been any worthwhile attempt to resolve them in a mature way? Or like sulking infants, is each one trying to wear out the other, including the regulator? Let me say that if the latter is true, it can be a painfully long and expensive process benefiting none and does not help in our efforts to achieve true financial inclusion. Assuring everyone that RBI was committed to the success of mobile banking."
33 Authorised Banks offering service ..!
RBI had authorised 52 banks to provide mobile banking services through the Interbank Mobile Payment Service (IMPS), only 33 banks were offering the service as of December 2011.
Of the 33 banks registered for IMPS mobile banking service, Axis Bank had issued the highest number of MMIDs (the unique ID used for mobile banking), at 49.44 lakh, followed by ICICI Bank, which issued 30 lakh MMIDs & SBI ( State Bank of India) with 27 lakh MMIDs.
For the calendar year 2011, the total number of transactions through the IMPS channel stood at 95,722, with the value of funds being transferred at Rs. 29.68 crore.
Against 85.80 Crore mobile connections in India, including 29.20 Croreusers in rural areas, only 55% of Indians have bank deposit accounts, indicating how mobile phones have reached places where banking services could not.
Promote Mobile Banking..!
RBI took a lot of effort to promote mobile banking, Padmanabhan said, including the removal of Rs 50,000 cap for mobile transactions and the promotion of a banklead mobile banking service, rather than a telecom company-lead service, so that more banking services could be offered.
NPCI is also working on expanding the scope of IMPS by removing the need for the recipient to have an MMID, using it for merchant payments and allowing transactions to be initiated through ATMs or over the internet.
Photo:
Mr G. Padmanabhan, Executive Director, RBI (left); along with Mr. A. K. Jagannathan, MD and CEO, Tamilnad Mercantile Bank, and Mr. M. Balakrishnan, COO, National Payment Corporation of India, at the launch of Mobile Banking in TMB, in Chennai.
Src: The Hindu
Zero Liability Policy..!
Speaking at a the launch of the mobile banking facilities of TMB (Tamilnad Mercantile Bank), Mr G. Padmanabhan, Executive Director, RBI, posed a question as to whether it the time was not ripe “to implement a zero liability policy”.
While leaving it to the industry to debate and discuss the issue, Mr. Padmanabhan compared the situation as obtains in India and the developed world, and noted that countries such as the US have adopted a ‘zero liability policy'. However, in India, the liability is on the customers.
Generally the credit card issuers are not liable for fraudulent transactions unless the customer reports the unauthorised transactions immediately. So the shift in liability from customers to banks comes into effect only after the customer informs the bank.
Banks argue that they take adequate steps to ensure safety of card transactions, and the least they expect from the customer is to report the card loss immediately.
While “this is understandable and logical” a consequence of this is that if a customer has adhered to all the risk measures prescribed by the bank, but yet unauthorised transactions have taken place in his/her account, “should the responsibility then not be with the card issuing bank?”
Mobile banking..!
Observing the huge mobile phone penetration in India, which is more than the penetration of banking services, Mr Padmanabhan asked if it was not time for banks to embrace mobile banking.
Mr Padmanabhan said,"In October 2011, 22.45 lakh transactions worth Rs. 161 crore happened over mobile phones. Close to 1 Crore customers have registered themselves for mobile banking. Yet, these numbers are “a drop in the ocean.What this means is that banks have not really made a significant penetration even amongst their existing customers to extend mobile banking services. Often questions such as ‘who owns the customer?' and ‘who controls the transaction' keep cropping up."
He also said, “Has there been any worthwhile attempt to resolve them in a mature way? Or like sulking infants, is each one trying to wear out the other, including the regulator? Let me say that if the latter is true, it can be a painfully long and expensive process benefiting none and does not help in our efforts to achieve true financial inclusion. Assuring everyone that RBI was committed to the success of mobile banking."
33 Authorised Banks offering service ..!
RBI had authorised 52 banks to provide mobile banking services through the Interbank Mobile Payment Service (IMPS), only 33 banks were offering the service as of December 2011.
Of the 33 banks registered for IMPS mobile banking service, Axis Bank had issued the highest number of MMIDs (the unique ID used for mobile banking), at 49.44 lakh, followed by ICICI Bank, which issued 30 lakh MMIDs & SBI ( State Bank of India) with 27 lakh MMIDs.
For the calendar year 2011, the total number of transactions through the IMPS channel stood at 95,722, with the value of funds being transferred at Rs. 29.68 crore.
Against 85.80 Crore mobile connections in India, including 29.20 Croreusers in rural areas, only 55% of Indians have bank deposit accounts, indicating how mobile phones have reached places where banking services could not.
Promote Mobile Banking..!
RBI took a lot of effort to promote mobile banking, Padmanabhan said, including the removal of Rs 50,000 cap for mobile transactions and the promotion of a banklead mobile banking service, rather than a telecom company-lead service, so that more banking services could be offered.
NPCI is also working on expanding the scope of IMPS by removing the need for the recipient to have an MMID, using it for merchant payments and allowing transactions to be initiated through ATMs or over the internet.
Photo:
Mr G. Padmanabhan, Executive Director, RBI (left); along with Mr. A. K. Jagannathan, MD and CEO, Tamilnad Mercantile Bank, and Mr. M. Balakrishnan, COO, National Payment Corporation of India, at the launch of Mobile Banking in TMB, in Chennai.
Src: The Hindu
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