Concept 1 · free preview
Digital banking channels: internet banking, mobile banking and beyond
Understand
Digital banking means using a bank's services through electronic devices instead of visiting a branch. RBI's Digital Banking Channels Authorisation Directions, 2025 define digital banking channels as modes offered over websites (internet banking), mobile phones (mobile banking) or other customer devices to carry out financial and other banking transactions with a high level of automation. Internet banking is accessed through a web browser on a computer or phone; mobile banking is accessed through a bank's mobile app, and also through USSD (codes such as *99#) and SMS, which work even on basic phones without internet. Phone banking (IVR/call centre), kiosks, ATMs and the bank's own digital banking units are other channels; UPI apps and wallets are payment channels that sit on top of bank accounts. RBI separates two levels of service. A view-only facility lets a customer only see balances and statements; any bank on Core Banking Solution (CBS) whose public-facing IT can handle IPv6 traffic may offer it. A transactional facility lets the customer move money and use other services; for this a bank needs RBI's prior approval and must meet eligibility conditions such as net worth and a clean cyber-security audit. Before activating any channel, the customer must register and accept clear terms (preferably in English, Hindi and the local language) that explain charges, stop-payment timelines, grievance redressal and the customer's liabilities. Security rules apply to every channel: multi-factor authentication for payments, device binding of the mobile app, alerts for every transaction, and monitoring app stores for fake look-alike apps.
Rule
Internet banking channel: browser-based access (excludes mobile apps); mobile banking channel: mobile apps, USSD and SMS.
View-only digital banking: allowed for banks on CBS with IPv6-ready public-facing IT, without prior approval (only an intimation to RBI).
Transactional digital banking: needs prior RBI approval (applied through the PRAVAAH portal) and eligibility conditions.
Once approved, a bank can offer all types of digital banking channels; terms must disclose charges, grievance process and customer liabilities.
Mobile banking other than through apps (USSD/SMS) must work across all mobile network operators.
Banks must bind the mobile app to the customer's device (hardware, software and SIM/service details); where more than one device is allowed, every new device registration must be notified to the customer.
Banks must monitor app stores and the web for fake apps imitating theirs and get them taken down.
Example
Ramesh, a farmer in Vidisha with a keypad phone, dials *99# to check his balance and send ₹1,200 to his son — mobile banking through USSD, no internet needed. His daughter in Bhopal uses the bank's app: when she installs it on a new phone, the app verifies her SIM and device, and the bank sends an SMS and e-mail saying a new device was registered.
Common mistake
Mobile banking is not only apps — USSD and SMS banking are also mobile banking channels under RBI's definition.
View-only internet banking does not need prior RBI approval; transactional facilities do.
A UPI app is a payment channel; it does not replace the bank's own internet/mobile banking authorisation.