In a recent notification, the Reserve Bank of India (RBI) has substantially increased the daily limit of banking transactions through mobile phones to Rs 50,000 per customer.

The existing ceiling of bank transaction via mobile banking – which helps customers make payments from their account through debit/credit depending on the funds transfer instruction received via mobile phones - is Rs 5000 for fund transfer against shopping, and Rs 10,000 for purchase of goods and services.

The latest RBI notification said: “Banks are now permitted to offer this mobile banking service to their customers subject to a daily cap of Rs 50,000 per customer for both fund transfer and transactions involving purchase of goods/services.”

Saying that the daily mobile banking transactions limit has now been consolidated into a single daily limit of Rs 50,000, RBI deputy governor KC Chakrabarty said in a recent FICCI seminar that the hike in the limit is an outcome of complaints from banks that the Rs 5,000-cap is too less for making certain transactions, like purchase of air tickets, through mobile banking.

In addition, Chakrabarty also said that since banks had sought the elimination of the current end-to-end encryption requirement, citing the reason that it added to the cost of mobile banking, the RBI has done away with the end-to-end encryption requirement for transaction up to Rs 1,000.