RBI proposed to ease norms of Internet banking for customers of Regional Rural Banks

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Regional Rural Banks

New Delhi: If you have an account in Regional Rural Banks or RRB (Regional Rural Banks), then there is good news for you. In fact, the Reserve Bank of India (RBI) in its statement on the development and regulatory policies has proposed to ease the norms of Internet banking for the customers of Regional Rural Banks RRBs.

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

The scope of services of Regional Rural Banks is limited
RRBs were created to provide basic banking and financial services to rural India. As a result, the scope of services of these banks was limited and facilities like internet banking were not sufficiently developed. RRB customers get non-transactional services like balance inquiry, account statement downloads,s or requests for checkbooks, and limited transactional facilities. However, internet banking will soon be rationalized with the promotion of digital payments in rural areas and ease of norms.

Speaking to Mint, Adil Shetty, CEO, of BankBazaar.com said, “The RBI guidelines for Internet Banking for rural banks are much stricter than other categories of banks, as there are legal, regulatory, and supervisory issues to be addressed. Technology and security standards and policies were sparse. Hence, the internet banking facility was initially strictly for non-transactional services such as balance inquiry, balance view, account statement download, request for checkbook, etc. Even after allowing online fund-based transactions, the financial norms to enable such transfers, both financial and non-financial, were broad.

Regional Rural Banks

Still waiting for details
Adil Shetty said, “Now as digital banking is spreading in rural areas, the norms for RRBs to be eligible to provide internet banking are being rationalized. The details are still awaited, but the move would mean that a large number of people from rural India would be able to access online banking facilities and come under the ambit of formal banking. This can be the first step towards accessing government benefits for a very vulnerable section of the society along with not only online banking but other credit and insurance products.”

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