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RBI to ease net banking norms for customers of regional rural banks

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RBI to ease net banking norms for customers of regional rural banks

NEW DELHI: The Reserve Bank of India (RBI), in its Statement on Development and Regulatory Policies, has proposed to ease norms for internet banking for customers of regional rural banks, or RRBs.

RBI, in a statement, said, “RRBs are currently allowed to provide Internet Banking facility to their customers with prior approval of the Reserve Bank, subject to fulfilment of certain financial and non-financial criteria. Keeping in view the need to promote the spread of digital banking in rural areas, the criteria for RRBs to be eligible to provide internet banking are being rationalised.”

RRBs were created to provide basic banking and financial services to rural India. Consequently, the scope of services of these banks was limited and facilities such as internet banking were not sufficiently developed. Customers of RRBs get non-transactional services such as balance enquiries, account statement downloads or requests for chequebooks and limited transactional facilities. However, internet banking will be rationalised soon with the ease of norm and promotion of digital payments in rural areas.

Adhil Shetty, CEO of BankBazaar.com, said, “The RBI guidelines for internet banking for rural banks have been much tighter than other categories of banks, as technology and security standards and policies to address the legal, regulatory and supervisory issues were sparse. So, the internet banking facility was initially strictly for non-transactional services, such as balance enquiry, balance viewing, account statement download, request for supply of chequebooks, etc. Even after online fund-based transactions were allowed, the financial and non-financial criteria for enabling such transfers were extensive. Now, however, as the spread of digital banking in rural areas expands, the criteria for RRBs to be eligible to provide internet banking are being rationalised. The details are still awaited, but the step would mean that a larger number of people from rural India would be able to access online banking facilities and come within the fold of formal banking. This can be the first step to not just banking online but also reaching other credit and insurance products as well as government benefits to a very vulnerable section of society.”

 

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