In a few months from now, it may be possible to withdraw, deposit and transfer cash using mobile phones without actually opening a conventional bank account.
The government is giving final touches to an elaborate technology and regulatory architecture for delivering banking services through “mobile-linked no frills accounts.”
The first such account is expected to be rolled out in September as government accelerates efforts to bring about financial inclusion of all section by spreading banking services in remote areas.
The government has identified 73,200 villages that have a population of more than 2,000 people where it will provide mobile-linked basic bank services by March 2012.
The objective is to use the 500-million-plus mobile phone network to offer basic financial services, especially in areas where no bank branches exist.
The roll-out will most likely start from Orissa where mobile phone coverage is below 50 per cent as it would serve the twin objectives of spreading both banking and cellular phone penetration, an official, who did not wish to be identified, said.
Present guidelines allow mobile phone users to deposit up to Rs 5,000 with telecom operators.
This amount can be used for merchant transactions, but no physical transfer of funds is allowed outside of the banking system. Opening such an account would also involve less paper work. All it might require is a valid government scheme ID.
The timelines for mobile-banking solutions as recommended by an Inter-Ministerial Group (IMG) were decided earlier this month.
The National Payment Corporation of India, a not-for-profit company that provides low-cost infrastructure for providing payment services among banks, is helping formulate the back-end technology solutions, an official, who attended the meeting, said. These would link the mobile number of the person to his no-frills bank account. Eventually, it will be integrated with the Unique Identity number once it gets operationalised.
“The roll out of the first accounts is likely to begin by September 2010,” another official said.