Hail this Central Bank! Mobile payments' SIM 'God'

I saw a very gratifying announcement today in the news. The Reserve Bank of India (central bank) has given its formal blessing to mobile payment systems in India.  "The Reserve Bank of India is finalising regulatory guidelines for mobile payment systems in India and it will place draft guidelines on its website by June 15, 2008. Though a number of banks offer mobile-based banking solutions for online fund-transfers and utility bill-payments, they do not facilitate payments to merchants. The central bank is in discussion with banks, service providers and industry bodies for formulation of the relevant guidelines."

This move by the RBI deserves kudos and should hopefully serve as a reference point for other Central Banks in emerging markets to follow suit. Being a relentless blogger on mobile banking/payments/credit, announcements like these make my day. These regulations should enable consumer to make small-value payments using a mobile phone, instead of using credit or debit cards or juggling with cash. It should also enable banks to deliver on the much touted 'reaching out to the unbanked' promise. I would in fact, request the RBI to pass regulations to enable mobile phone numbers to be used as citizen Ids and open up the market to credit on a mass scale. Mobile banking regulations will obviate the necessity for banks to open costly branches, manage risk and also consumer hassles. Regulations from a central bank is normally the 'killer application' that banks would look for! Since India is already the fastest growing mobile phone market (second only to China; now overtaken USA), it is but logical for mobile service providers to jump in enthusiastically.

I personally, am looking forward to considerable movement on this front. This is Banking 2.0 at its best!