RBI allows banks to tie up with e-commerce companies

MUMBAI: The Reserve Bank of India has said that it is not averse to banks entering into joint ventures with e-commerce firms to smoothen payments or appointing them as business correspondents for acquiring new customers. Integrating e-commerce with their own platforms will allow banks to work around the two-factor authentication requirement while doing transactions.

To ensure reliability of banking transactions in the mobile space, RBI has asked the Telecom Regulatory Authority of India (Trai) to give priority to banking transaction over others while messaging. The central bank has also asked Trai to bring down the present fee of Rs 1.50 per banking transaction using the *99# Unstructured Supplementary Service Data messaging service.

Speaking at the launch of Axis Bank’s Suvidhaa Prepaid Card in Mumbai on Monday, RBI deputy governor H R Khan said that there is a need to use multiple instruments to promote banking. “We need to allow many flowers to bloom,” said Khan. The Suvidhaa Infoserv helps banks reach out to unbanked.

Elaborating on the partnership between banks and ecommerce firms, Khan said “The ecommerce space is galloping at such a fast pace that we need to take cognizance,” He added that although RBI does not have any particular model for partnerships, both could work together to facilitate payments on e-commerce sites. “I think there is a need for collaboration. E-commerce sites and banks need to integrate and that is something in interest of everyone. We have not hit upon a plan but we will allow the market to develop and wherever there is a need of nudge from our side, we will do that,” said Khan.