RBI may check door-step banking

The Reserve Bank of India (RBI) is taking a close look at 'door-step' banking. The apex bank may put some checks and balances for the facility being offered by some of the new generation private banks and foreign banks.

The reason cited is that these transactions are being carried out in the residential confines of the customers and not within bank premises.

Sources in the banking sector said even as door-step banking had become a global practice, the RBI is not gung-ho about it.

"The RBI will not abolish the practice altogether. However, it is chalking out some norms to streamline the practice of delivering cash at the door-step of the customers," said a senior banker.

An RBI official confirmed the move. The bank will soon come out with a set of guidelines on this. A senior official of a new generation private bank said, "Most banks offer such services without seeking any specific regulatory approval. The RBI is looking to ensuring safer modes of door-step banking transactions. It will not stop the practice."

The guidelines are likely to focus on partnerships that banks enter with service providers such as marketing agents and so on to make sure that the money is delivered at the right place.

Another banker pointed out that door-step banking has a systemic risk as the customer's cheque follows the payment made at his residence. This also involves several risk management concerns.

Door-step banking, as the name suggests, is a convenient form of banking for customers. Commercial banks hire agents to deliver cash at the time and venue specified by the customer. Technically one can avail of this facility when one does not have time to visit a bank branch or an ATM.

However, normally bank customers use this in cases of emergency. "We normally get calls from old people and busy executives to deliver cash at their homes or office," said a banker associated with the retail division of a private bank.

Active players in this service include ICICI Bank, Kotak Mahindra, ABN Amro and Standard Chartered Bank. The customer can demand any amount between Rs 3,000 and Rs 2 lakh to be delivered at a place of their choice and the delivery time is in the range of three to four hours.

The service is not available after 7 pm on weekdays and on Sundays and bank holidays. However, bankers acknowledge that a minimal percentage of their clients use these services.