RBI to Enable ATM Withdrawal Sans Bank Account

Reserve Bank of India Governor Raghuram Rajan said that people without bank accounts in India would be able to withdraw money from automated teller machines (ATMs).

The RBI has recently approved the in-principle setting up of a payment system that will allow funds transfer from bank account holders to those who do not have accounts through ATMs, Rajan said on the sidelines of a Nasscom function here on Wednesday.

Essentially, the sender can have the money withdrawn from his account through an ATM transaction. The intermediary processes the payment, and sends a code to the recipient on his mobile that allows him to withdraw the money from any nearby bank’s ATM.

“The system will take care of necessary safeguards of customer identification, transaction validation, velocity checks etc. We need more such innovative products, some of which mobile companies are providing,” said Rajan.

The RBI Governor also said that no decision has been arrived at on the issue of setting up 'Payments Banks' or specialised banks to provide services to small businesses.

“At this point there is no decision to move forward. We will look at it in great detail, including what value it brings, the viability as well as whether it presents arbitrage opportunities vis-a-vis the Schedule commercial banks,” he said.

Concern over virtual currencies

Rajan also expressed concern over the methodologies being used to determine the value of virtual currencies like Bitcoin.

“As a currency I do worry a little bit when the underlying fluctuates tremendously. One of the values of a currency is some stability,” he said at a Nasscom function here on Wednesday.

The RBI is presently studying the issue but did not clarify whether this virtual currency is legally valid. In late December, the central bank had warned on the dangers of investing in virtual currency.

“If a currency is a target of speculation as opposed to primarily a means of exchange, it does create some concerns for the user,” the governor said referring to the value of bitcoins that have multiplied in recent months.

Rajan Cautions on Fraudulent Emails

RBI Governor Raghuram Rajan  warned against fraudulent emails that are being sent under his name asking people for their bank account details. “Many of you must receive frequent emails, purportedly from me, informing you of a large sum of money that awaits you at the RBI, and urging you to send me your account details so that I can transfer the money to you. Let me assure you that the RBI does not give out money, I do not send these emails, and if you do fall for such emails, you will lose a lot of money to crooks and be reminded of the adage – if anything looks too good to be true, it probably is not true,” he said.

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