RBI prohibits Mobile network operators from offering mobile wallet facility
The RBI asserted that it will not permit mobile network operators to offer cash-out or mobile wallet service.
Why RBI has asserted this?
- As per RBI, mobile wallet is basically an e-money product and therefore permitting mobile network operators provide this facility may bypass banking regulations.
- However, RBI allows transactions if mobile network operators operate their services as business correspondents of banks.
- RBI is concerned because of security issues related to the quality of flow, Anti-Money Laundering rules and Know Your Customer rules.
What is Mobile Wallet?
- Mobile wallet which is also abbreviated as M-Wallet, is a an electronic account that is linked to a person’s mobile phone in which money can be electronically deposited and the same can be used as cash.
Utility: Internationally, M–Wallets are used to pay for goods at stores, pay for public transportation, make donations and pay bills.
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