MUMBAI, INDIA: Finally, after a long wait the Reserve bank of India issued on Monday the draft guidelines for mobile banking.

As per the new guidelines, the RBI has put a limit of Rs. 2500 per transaction and it would be subject to an overall cap of Rs. 5000 per day, per customer. Banks may also put in place monthly transaction limit depending on the bank's own risk perception of the customer, the guidelines said.

It also put forward many restrictions on implementing the service. Only those banks, which are licensed and supervised in India and have a physical presence in the country, would be permitted to offer mobile banking services, and it would be subject to one-time approval of the Reserve Bank of India, by furnishing full details of the proposal.

And the services shall be restricted only to customers of banks and holders of debit/credit cards issued as per the extant Reserve Bank of India guidelines, it said.

The guidelines also say that all mobile banking shall be permitted only by validation through a two-factor authentication and one of the factors of authentication shall be mPIN or any higher standard. The mPIN shall be stored in a secure environment, the guidelines say.

While only those banks with core banking solutions would be permitted to provide mobile banking services, it also says no cross border transfers will be allowed and the transactions should be based on Indian rupee.

Prior to offering the service the banks should also put in place a system of document based registration with mandatory physical presence of their customers. And it is the responsibility of the banks to ensure that the technology used for mobile banking is secure and that there is confidentiality, integrity, authenticity and non-repudiability.

Responding to the RBI guidelines, Vijay Balakrishnan, chief marketing officer, Obopay India said: "We believe that mobile payments should be made accessible to all bank holders once the RBI stipulated safety and security measures are in place.

But he suggested that given the transaction limits suggested by the RBI there is no harm in opening this to a bank's entire subscriber base.

"It is our belief that mobile banking and payments should be made an immediate priority given the fact that India is the world's second largest cellular market and records 8 to 9 million new customers every month," he added.

He also suggested that any restrictions on microfinance using mobile payments, if any, should be removed.