The Reserve Bank of India has expressed its dissatisfaction on the reporting standards of foreign banks operating in the country, which it says need improvement.

RBI deputy governor KC Chakrabarty said: "You need technology if you have a large branch network. Foreign banks don't have very large networks. So we are okay with whatever technology they have if they are not having any problem, but yes, we are not that happy with their reporting. They need to improve their reporting and that is what as a part of requirement for automated data flow is applicable to all banks and not just foreign banks."

Mr Chakrabarty was speaking at a seminar here on banking technology and its role in driving growth.

He stressed that mobile banking for the masses was not an unviable option for banks as such, but it was important for them to develop an ecosystem for mobile banking to pick up in India. He also clarified that maintaining the maximum limit of Rs 50,000 for each mobile transaction is not a deterrent. "It's not scaling up because we don't have the ecosystem in place. Mobile banking is for financial inclusion. How many people would want to do a transaction for more than Rs 50,000? Banks are preparing themselves for an ecosystem, which takes time," he said.

"So you can't say it is not happening. Mobile banking is not for ultra rich people, they have many other resources for fund transactions. It has to serve the purpose of reaching out to areas and people where there are no branches," he said.

Mr Chakrabarty was of the opinion that technology will change the rules of the game in the banking sector. "Either rule will be changed due to technology or through technology for banks. When it is done through technology, banks would do it by choice and when it is done due to technology it would mean banks would do it out of competitive pressure. If neither of the two happens, banks will be out of the game," he said.

He also said in order to make the business correspondent (BC) model viable, BCs have to be compensated well, since they make the frontline of the bank and bring in rural customers. (Econmoic Times)