Push mobile banking to reach more people, remote areas: FM
Tuesday, 28 September 2010, 20:02 IST
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Bangalore: Finance Minister Pranab Mukherjee today called upon banks and financial institutions to lay emphasis on mobile banking as a means of increasing penetration in un-banked areas and hinterlands. He said there are areas in the country where banks are not able to open brick and mortar branches and such localities could be fertile ground to expand banking through mobiles. "In such a scenario, banks should rely more on mobile banking which would also help in reaching the goal of financial inclusion," Mukherjee said. The FY'11 budget has proposed bringing 60,000 villages which have a population of 2,000 and above under the ambit of banking and financial services by March, 2012. The government and the Reserve Bank have been pushing banks to work towards this objective, and mobile banking is expected to play a crucial role in this ambitious scheme. According to the latest study by the Boston Consultancy Group, bankers in India are optimistic about reaching out to un-banked sections of society through mobile phones. The survey covered 13 public sector banks, seven private sector lenders and four foreign-origin banks. While 57 per cent of the respondents from public sector banking space expressed their "high optimism" about efficacy of mobile banking, 43 per cent were "optimistic" about it. None of the PSB respondents was pessimistic about the potential of mobile phones to take financial services to the 55 per cent un-banked population of the country. Besides, with the increase in penetration of mobile telephony, cellular operators have been demanding that the RBI allow them to introduce mobile banking services in a big way. In October, 2008, the RBI had issued final mobile banking guidelines and capped daily fund transfer at Rs 5,000 and purchases at Rs 10,000. However, the RBI had desisted from issuing mobile banking licences to telcos as it was apprehensive of them being misused by nefarious elements. Furthermore, it wanted the initiative to be driven by banks and not telcos. In July, RBI Governor D Subbarao had said: "The RBI has a clear preference for the bank-led model, given the growing concerns about money laundering and financing of terrorism, a bank-led model is decidedly safer and more sustainable than one being pushed by telcos." He, however, had admitted that a mobile operator-led model helps accelerate financial inclusion. Finally, on September 15 this year, Bharti Airtel was issued a licence to launch mobile banking services by the RBI, but without cash withdrawal or redemption facilities. Mukherjee today urged banks to follow the lead of State Bank of India and the Corporation Bank, which have take initiatives in Mobile Banking.
Source: PTI
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