Page 191 - ITU-T Focus Group Digital Financial Services – Technology, innovation and competition

ITU-T Focus Group Digital Financial Services
Technology, Innovation and Competition

promote the use of electronic payments. New Electronic Money Issuers and Agent Guidelines were also
released. 69

India

India moved away from a closed banks-only model and introduced a new enabling framework characterized
70
by the new ‘payments bank’ concept developed by the Reserve Bank of India (RBI). While the new payments
bank framework is still a bank regulation-based model, RBI has allowed entities such as MNOs to apply for
banking licenses as banks. They can accept deposits up to INR 100 000 (USD 1 466), provide payments and
remittances services, and distribute third-party financial products. However, they cannot lend or issue credit
cards, although they can provide debit cards and internet banking facilities. India had previously allowed
71
non-banks to issue prepaid payment instruments. 72

Nigeria
Nigeria does not allow MNOs to independently operate DFS services, although other non-banks are able to
do so. MNOs can, however, provide agent services to banks and non-banks.
73
Sri Lanka

When DFS services were launched in 2007, the regulatory framework required customers to have a bank
account. In 2011, the regulator changed the model, opening the market to both bank and non-bank providers.
MNO Dialog now operates the largest DFS implementation, eZ Cash, which is interoperable with most MNOs,
except Mobitel. 74

Nepal

Until July 2016, DFS in Nepal was strategically linked to mobile banking initiatives and thus based on a bank-
based model. This all changed with the issuance of new regulations in early July 2016, which allowed the
75
licensing of both bank and non-bank entities as PSPs. Both licensed banks and non-banks, including MNOs,
76
are eligible to apply for such licenses. MNOs, however have to set up subsidiary entities to provide such
services as well as a commitment in writing that access to its network to other PSPs will be provided on a
non-discriminatory basis. Non-compliance to the latter obligation can result in cancellation of the PSP license. 77

69 Ghana Web (2016) Ghana Digital Financial Services Programme Launched, available at https:// goo. gl/ V53zsF.
70 Non-banks have been able to offer PPIs, however, the semi-closed PPIs (so called ‘wallets’) permitted for non-banks did not allow
for cash-out. This made it difficult to offer a valuable product to unbanked and underbanked users.
71 MNO Airtel was the first to launch a payments bank in India. Their customers use their mobile number as an identifier for the

account number.The bank is fully digital and paperless, with even account opening being done using Aadhaar-based eKYC. Times
of India (2016) Airtel Rolls out India’s First Payments Bank, available at http:// toi. in/ G- ZL7b7. Airtel entered into a pact with Kotak
Mahindra Bank, which agreed to acquire a 20 per cent stake in the new payments bank.
72 The guidelines related to prepaid payments instruments. See RBI (2016) Master Circular – Policy Guidelines on Issuance and
Operation of Pre-paid Payment Instruments in India, available at https:// goo. gl/ fl41Ns .
73 The Central Bank of Nigeria (CBN) does, however, license other non-banks, the reason ostensibly being because the CBN felt
that a dominant MNO-led model such as in Kenya could create a monopoly and pose a systemic risk for the country. See Mobile
Money for Development (2013) The Debate over MNO-led or Bank-led Mobile Money Strategy in Nigeria – the Perspective of a
Super Agent, available at https:// goo. gl/ 0r9UTB.
74 eZ Cash also partnered with the Commercial Bank of Ceylon (CBC) as part of their interoperability approach. This facilitates load-
ing of the eZ Cash wallet from CBC bank accounts and withdrawals from CBC ATMs.
75 Nepal Rasta Bank (2016) Licensing Policy for Payment Related Institutions/Mechanisms 2073, available at https:// goo. gl/ xJT9DF.
76 For example e-Sewa, the most popular mobile wallet and digital payment portal in Nepal. See www. esewa. com. np
77 ADB (2016) ibid.

167