Bank customers may soon use their cell phones to do most of their banking transactions, thus saving time and money.

In the final guidelines on mobile banking transactions, issued on Friday, RBI set limits for single and daily transactions through mobile phones and also laid down rules for tracking suspicious transactions through mobiles.

Mobile banking involves debiting or crediting funds into a customers account on the basis of instruction received through the mobile phones. A transaction limit of Rs 2,500 is imposed per mobile banking transaction. This is subject to an overall cap of Rs 5,000 per day, per customer. Banks may also put in place monthly transaction limits depending on the bank's own risk perception of the customer.

According to the RBI, "Banks are required to put in place appropriate risk mitigation measures like transaction limit (per transaction, daily, weekly, monthly), transaction velocity limit, fraud checks, AML checks etc, depending on the bank's own risk perception, unless otherwise mandated by the Reserve Bank."

However, this facility would be restricted to only bank accounts and credit card accounts, which comply to know your customer (KYC) norms. This would cover a customer base of around 80 million people in the country.

Banks that wish to provide mobile banking services should seek a prior one-time approval of the RBI by furnishing full details of the proposal. Only banks that have implemented core banking services will be allowed to provide the services, said RBI. Also, only Indian currency would be used for the services and cross-border transfers through mobile banking is strictly prohibited. Banks have to be based, licensed and supervised in India.

At the same time, the RBI has recommended that all mobile banking transactions are validated through a two-factor confirmation system, thereby complying with the latest security standards. Banks should also ensure that customers having mobile phones of any network operator are able to avail the service.

The long-term goal of mobile banking is to enable funds transfer from account in one bank to any other account in the same or any other bank on a real time basis, irrespective of the mobile network of the customer.

The RBI guidelines also state that banks should file Suspected Transaction Report (STR) to Financial Intelligence Unit-India (FID-IND) for mobile banking transactions, similar to normal banking transactions. They should also not compromise on their know-your-customer and anti-money laundering guidelines.

Recognizing the need for mobile phones as a delivery channel, RBI said, "The rapid growth in users and wider coverage of mobile phone networks have made this channel an important platform for extending banking services to customers."