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Home Mobile Banking  (M-Banking)                            

 Mobile banking in India
RBI gives go ahead to mobile banking

  March 24, 2008: Barclays Bank recently launched ‘Hello Money’, a mobile banking service that enables one to do an entire gamut of things — enquiry, funds transfer, bill payments and requests for financial statements. Until this product arrived, the best ‘mobile banking’ one could do was to check bank balance or phone-in instructions to the banker. But with Hello Money, a customer of Barclays can, for example, pay his electricity bills via the mobile phone. Click a few keys and the account is debited, the bill is paid — all without any human interface. Over time, Barclays intends to enlarge the scope of this service to include payments to a whole lot of 
other things, such as for purchase of an air ticket.
  ANZ Bank has launched a new  mobile banking
ANZ Bank has launched a new Java- based mobile banking application to give ANZ customers the opportunity to perform a selection of banking transactions from  their mobile phones.
  Registered ANZ customers will be able to make payments and transfer money from their accounts using M-Banking and request statements as SMS messages. To ensure the security of its customers' accounts, ANZ have implemented SSL (Secure  Sockets Layer) encryption similar to regular Internet banking, and transactions from an account can only be performed on a single pre- registered mobile handset and only after password authentication.

Mobile technology for railways 
NEW DELHI, March 07, 2008: The Indian Railway Catering and Tourism Corp Ltd (IRCTC), a division of Indian Railways which issues tickets to about 15 million passengers daily, launched IRCTC mobile services to provide "cutting-edge technology" in April last year. 
  IRCTC mobile is a result of mobile transaction technology pioneered by technology guru Sam Pitroda's Chicago- based company C-SAM,  Inc. IRCTCmobile is device and network agnostic, which means users can buy any standard phone on any network from any of the operators such as Bharti, BSNL, Reliance or Vodaphone and book and purchase rail tickets on mobile phones.  
  The solution, which works both on SMS as well data connection, offers icons that the user can choose from to book, purchase and electronically receive train tickets. 
  IRCTC mobile allows passengers to perform various services such as book tickets using credit and cash cards, view train schedules, check availability, get fares, perform inquiries and access many other associated information services through mobile phones. It has the potential to become the first mass market adoption of a technology which is considered unrivalled in terms of the number of mobile applications and services it offers. Given the size and scale of Indian Railways it can easily become the world's most widespread mobile ticketing application. 
  For a country that adds some eight million mobile phones a month and could see the number of total mobile phones rise to a staggering 500 million by 2010 from the current 280 million, mobile applications such as railway ticketing are the most effective way to capitalise on such unprecedented connectedness. 


  Mobile banking (M-banking) involves the use of a mobile phone or any other mobile device to undertake financial transactions linked to a client’s account. M-banking is one of the newest approaches to the provision of financial services through ICT, made possible by the widespread adoption of mobile phones in developing and under-developed countries. The roll out of mobile telephony has been rapid and has extended access well beyond already connected customers in these countries. 
 RBI gives go ahead to mobile banking
 MUMBAI, October 8, 2008: Customers will now be able to credit and debit money from mobile phones sitting at their homes as the Reserve Bank of India today approved mobile banking norms for the banks with immediate effect. Core banking solutions (CBS) enabled banks, would be allowed to offer mobile banking services to customers having debit or credit cards, the regulator said in a notification here. 
However, the banks would not be allowed to use mobile banking services for cross-border inward and outward transfers, RBI said. 
  Initially the banks would be allowed to offer this facility up to Rs 5,000 per customer for funds transfer and Rs 10,000 per customer for transactions involving purchase of goods or services. 
  They, however, would be permitted to increase the monthly transaction limit depending on the credit profile of the customer. The banks have to follow know-your-customer and anti-money laundering norms to provide mobile banking facility to customers. Also, they have to file suspicious transaction report to the 
Financial Intelligence Unit for mobile banking as applicable in case of normal banking operations. 
  Customers have to register with the banks to avail the mobile services, the apex bank said adding there would be a document-based registration and physical presence of the customers would be mandatory. Banks would be required to communicate complete details of the service offered to the customers at the time of registration. In addition, the banks have to insure themselves against risks 
arising out of unauthorised transfers through hacking. 
  RBI guidelines for mobile banking 
  MUMBAI, Septembr 20, 2008: The Reserve Bank of India on Friday released its final operative guidelines for mobile banking. The central bank has decided to keep the limit on the ticket-size for mobile banking at Rs 2,500 per transaction, and Rs 5,000 per day. Banks have also been allowed to put in place a monthly transaction limit, depending on the bank’s risk perception of the customer. While the guidelines will enable lenders such as State Bank of India and Axis Bank to go ahead with their launch of mobile-banking services, the central bank has decided to restrict the services only to holders of debit and credit cards. The card user base in the country is 80 million, with 55 million debit card users and 25 
million credit card users. 
  Only Indian rupee-based domestic services shall be provided on the  mobile- payment platform, and the use of mobile-banking for cross-border transactions have been strictly prohibited. Banks which are based, licensed and supervised in India will be allowed to offer such services. Further, only banks which have implemented the core banking platform will be allowed to offer mobile banking. 
At the same time, the RBI has recommended that all mobile banking transactions are validated through a two-factor authentication system, thereby complying to the latest security and encryption standards. Source: The Economic Times  
  Mobile Technology
  A mobile network offers a readily available technology platform onto which other services can often be provided at very low cost to deliver an effective result. Mobile data channels are often under-used and therefore may be offered at low cost by the network operator. 
   M-banking services which use channels such as SMS can be carried at a cost of less than one US cent per message. The low cost of using existing infrastructure makes such channels more amenable to use by customers with lower purchasing power and opens up possibilities of access to services, which till now have not reached them due to high cost of service delivery. 
   Although M-banking is one channel in the wider domain of e-banking, there are reasons to single it out for focus — especially because there are a lot more people with mobile phones than bank accounts in India as well as developing and underdeveloped countries in Asia and Africa. 
   Bringing more “unbanked” people to the financial mainstream is important because without access to mainstream banks, the “unbanked” end up using fringe financial service entities to conduct routine transactions. The fringe service providers offer no opportunity to build a credit history, which then 
becomes essential for accessing other affordable financial products, such as loans or low-interest lines of credit. 
   Without traditional credit, individuals are vulnerable to exploitation by abusive lenders offering high-interest short-term loans and very expensive rent-to-own products. Also of considerable importance, but often overlooked are the public safety implications for the “unbanked”. These individuals are often the victims of crime because many operate on a cash-only basis, and end up carrying significant amounts of cash on their person or store cash in their homes. 
   M-banking could provide cost-effective solutions to address some of these disadvantages. The emerging models of M-banking can be placed in different categories, based on the dominant roles played by the parties involved: the bank, the mobile operator, the customer and in some cases, a third party product provider. 
   The models vary from one in which a bank adds on a mobile channel to its existing distribution channels, through hybrid models where a mobile operator may bring different branding, product set and/or distribution system to a bank-based product to a operator-dominated model in which the operator itself is responsible for the deposits taken. 
   M-banking is new in most countries and outside of East Asia, most M-payment models even in developed countries to date have operated at limited scale. However, micro-payments connected to the purchase of premium rated services on a mobile phone have relatively grown faster. 
Mobile Banking in India
 India is marching towards m-commerce - a world where you can make all payments by keying in instructions on your mobile phone. In India, however, there is a limitation on the availability of functions that can be deployed by banking customers. 
  Most m-banking transactions today are ‘information-based’ -- customers engage in m-banking services like balance enquiry, last three transactions, "alerts" for strange activities in bank accounts etc. Some banks like IDBI Bank are also offering bill-payment services to customers through m-banking. 
  However, actual cash transactions like fund-transfer, payment of bills at a restaurant among others have not yet been introduced in India. There are many reasons for this. 
  Firstly, as m-banking is currently SMS-based, the transaction delivery time is not guaranteed since it is dependent on factors like SMSC (short message service centre) congestion and network strength in the area where the customer is located. Secondly, there is an issue of repudiation as till date there are no clear guidelines on wireless payments. 
  In the very near future, one can see m-banking leaping into a new phase. With the advent of Java-enabled mobile devices, the shape of m-banking services is in for a change.  One would also be ensured the same amount of security and comfort as one would be when using internet banking. 
M-banking Implications
 In the more affluent economies, a good infrastructure for a cashless environment 
is already prevalent and most people have bank accounts and access to both debit and credit facilities. These factors are incentives in the developing countries to move the population at large away from cash with introductions of low cost solutions such as micro-payments to further efficiency gains.
 SMART Money
 The service was launched in December 2000 in co-operation with First E-Bank, 
which has since been acquired by Banco de Oro, and MasterCard, one of the 
world’s leading payment services providers. According to SMART, SMART Money was the world’s first re-loadable electronic cash wallet, linked together by their 
cellular network. Once cash has been transferred to the SMART Money account, it can be used in thousands of shops and restaurants. The cash value can also be 
used to load airtime, pay utility bills, or transfer money from one SMART Money 
card to another. 
 The service was launched in October 2004, with an initial set of three anchor 
services; international and domestic remittance, P2P (phone-to-phone or person-to-person) transfers and payments for retail purchases. With G-Cash, all 
of GLOBE’s subscribers are m-Commerce-enabled. As users do not need to have a card or bank account to be part of the service, G-Cash is able to provide 
M-Commerce capability to a previously underserved segment of the market, 
including those who currently do not do banking. Unlike SMART’s approach whereby it operates the service jointly with BDO, GLOBE on its own maintains records of all transactions and arranges settlement between the retailers and the G-Cash customers. G-Cash provides services through close to 4,900 retail outlets 
nationwide and more than 500 G-Cash partners.
 Mobile Remittance
 Migrant remittances, which are personal flows from migrants to their friends and 
families, have become a major source of external development finance, and in the 
process, play an effective role in reducing poverty.  Capitalizing on the benefits of such a system, remittance services can become cheaper and more convenient, thus improving financial access of migrants, their beneficiaries and the financial intermediaries in the origin countries.
 Microfinance through Mobile Technology
 Currently, a major constraint to microfinance is the high cost of operating in 
remote areas. Many institutions are now working toward low-cost delivery options 
such as Internet banking and cashless transactions to help the rural poor. The mobile devices that could be a more efficient tool for such transactions. For people in such rural areas, using computers is often a problem due to faulty Internet connections and frequent power failures. Hence, providing microcredits through a mobile platform (SMS-based) could be the best way to reach out to the poor.









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