Soon, Rural India to Perform Banking Transactions Using Mobile
Mumbai, India, August, 06 2008 -
Masses in under-banked regions may now be able to perform banking transactions using their mobile. Obopay, a payment services provider and Grameen Solutions, a Grameen Bank subsidiary, have entered into a tie-up to provide mobile-banking services to the poor in India and Bangladesh. However, these services will have to wait for the Reserve Bank of India’s (RBI) guidelines which are expected anytime now.
This may include services such as cross-border fund transfers, payments, savings and credit accounts. However, it can be operationalised only after the central bank releases final guidelines on mobile banking. By December 2008, the two entities are planning to launch fund transfers between India and the US.
RBI has asked banks to put their plans to launch mobile-banking services on hold till these guidelines are released. Obopay plans to enter into a partnership with three banks and a few micro-finance institutions based in India, such as SKS Microfinance and Ujivan. The company is also looking at utilising the business correspondent model to expand.
Speaking on the sidelines of the conference, Obopay executive director Aditya Menon said, “We are in talks with four banks and a few MFIs in India. The aim is to use the mobile device for facilitating payments, but this can be done only though regular banking channels. This will help lower cost of transactions for MFIs which face huge operational expenses, as they largely offer doorstep services.”
According to statistics compiled by Obopay, only 34% of the Indian population currently has an access to banking services. India is seen having the second-largest number of unbanked households at 13.5 million, and among those who have an account, nearly 40% do not even access the account once a month.
Obopay CEO Carol Realini said, “Both Obopay and Grameen Solutions are run on a for-profit model. However, the idea here is to provide services, which are affordable and convenient for end-users. Also, MFIs offering services at customers’ doorstep could be risky. Hence, it serves better to make it automated. We are targeting a one billion customer base by 2018.” The idea is to roll out two platforms — one in India and the other in Bangladesh. Obopay would bring in the technical expertise by providing the last-mile connectivity while Grameen Solutions would provide the know-how from the micro-credit angle.