RBI working on integration between e-commerce firms and banks

MUMBAI: The Reserve Bank of India has called for greater cooperation between banks and ecommerce companies and said it is open to them forming joint ventures with each other and ecommerce firms acting as banking correspondents.

"Banks will have to take cognizance of ecommerce the way it is galloping," RBI Deputy Governor HR Khan said while speaking at the launch of the Suvidhaa pre-paid card.

Partnership between banks and ecommerce companies could be on the same line as the partnership between banks and telecom companies, he said. Banks have tied with several telecom companies to make instantaneous transfer of funds possible. Such tie-ups allow customers to transact through mobile banking.

Ecommerce transactions have picked up pace in the past year or so with several companies offering steep discounts on online shopping. "We will have to see how we provide platform between ecommerce and banks," Khan said.

Among other things, Khan said the RBI is considering a proposal to allow pre-paid card issuers to issue rupee cards of over Rs 2 lakh to NRIs and foreigners coming to India. As of now, RBI has set a limit of Rs 2 lakhs that can be loaded on pre-paid card issued to foreigners. He said the central bank has also approached the Telecom Regulatory Authority of India to give banking transactions priority over other messages.

He said the RBI may consider relaxing the current two-factor authentication for small-value transactions but ruled out any plans for doing away with it completely. "We are ahead of other advance countries on two-factor authentication, so we should not slip back," he added.

The deputy governor stressed on the need for inter-operatability to derive the benefits of financial inclusion. "The RBI is considering several proposals, for instance if it is possible for the BC (banking correspondent) of one banks could do the same function for another bank in the same region," he said.

The Suvidhaa pre-paid card would be issued by Axis Bank in partnership with Suvidhaa Infoserv.