Over the years, the financial and banking sector in India has been opened up slowly, but substantially, with a view to promoting financial inclusion. This Note examines the current state of regulation on m-banking in India and concludes that it is already a largely enabling environment for bank-led models. It is not restrictive regulations that are at the core of slow off take of mobile banking services (especially for the low income segments), but the absence of a strong value proposition for the customer.

In addition, most banks and BCs are still struggling with the basics of their business models, and thus have not been able to scale up operations. Over the years, RBI has clearly shown its intention to open up and relax regulations when the industry shows signs of stability and a promise to grow. It is for the banks to harness the potential of BCs and BFs to the fullest extent possible under the existing regulatory framework and then ask for more concessions or guidance from the RBI where these are necessary.

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