The country's financial regulatory body, Reserve Bank of India has relaxed the norms for mobile banking by raising the caps on fund transfers as well as mobile-based payments.

Continuing with its earlier announced draft guidelines for mobile banking services in India, RBI has increased fund-transfer limit from Rs 2,500 a day to Rs 5,000 a day. The regulator has also provided a cap of Rs 10,000 for purchases through mobile. The move was made after requests from banks to raise the limits for mobile banking transactions.

Bank customers of ICICI Bank and HDFC Bank have started enjoying the facility of crediting and debiting money from mobile phones. Also banks like State Bank of India and Axis Bank are expected to roll out their mobile-banking services soon.

RBI said that banks should ensure mobile banking services could be availed by customers of all network operators. Long term goal of mobile banking is to enable funds transfer from account in one bank to any other account in the same or other bank in real time.

The Central Bank is also planning to relax the registration procedure for mobile banking on a case-to-case basis, when banks apply for their licenses. Presently, banks are required to get a form signed by all their customers.

Industry players have been positive with the changes and expect mobile banking to become more practical and broaden its scope. Sanjay Swamy, CEO of mobile payments provider mChek, said: "The increase in limits is a significant change, which shows RBI's intention of making the medium a universally acceptable payment tool."

Further, Vijay Balakrishnan, chief marketing office of Obopay India, said: "The relaxation in the registration process is a positive step since one needs to keep the customers' convenience in mind for new initiatives like these."

Mobile-payment firms are expecting a further relaxation of norms after the successful roll-out of m-banking products. Dewang Neralla, director of Atom Technologies, said: "These guidelines definitely provide the vision of our regulator in terms of ensuring a secure payments environment. The specific focus on security is very welcome and the changes made to the transaction limits moving towards only daily limits will allow more flexibility to the customers for their payments as well as the banks for defining their risk parameters . A Rs 10000 limit for purchase of goods/services covers most of the basic transactions except may be airline ticketing or purchase of electronic/ high end luxury goods. However, we are hopeful that this would be relaxed to a certain degree at some time based on the confidence gathered in the system so as to bring in all commerce into the mobile payments net."

Reserve Bank of India has approved mobile banking norms for banks with immediate effect.

Although mobile banking in India is viewed by the government as a potent tool for financial inclusion has marked substantial improvement, there are still many hurdles before it can fulfill its objective of reaching to the un-banked masses.