M-banking may soon move beyond checking a/c status 

THE UPA government may allow cellular operators and other corporate entities to offer financial services on mobile phones as it looks to speed up its efforts to ensure that the weaker sections of the society have access to such facilities at affordable costs.
A multi-ministerial government panel chaired by the cabinet secretariat has asked the Reserve Bank of India to look into the possibility. If RBI agrees to this proposal, services such as Nokia Money can be launched in India bypassing banks, and entities such as the Bharti Airtel-Western Union joint venture can offer mobile money transfers without utilising bank networks.
Currently, banks and cellular firms /corporate entities that have tie-ups with them can offer basic financial services on mobile phones using bank networks. Earlier this month, RBI had informed the multi-ministerial government panel that it would take a final decision on this issue by August-end.
The central bank had said in its annual monetary policy that it was considering using mobile phones as a medium for taking banking facilities to remote areas. It said banks and cellular operators must cooperate, rather than compete, with each other on this initiative.
India, the worlds fastest-growing mobile market, adds 15 to 20 million new cellular users every month. The country, with over 1.2 billion population, had over 635 million mobile connections in June. The number of individuals having a bank account is much smaller.
During the first meeting of the multi-ministerial panel on July 2,it was also decided to allow all citizens to open a mobile-linked-no-frills account for financial transactions. This account can be operated from mobile phones, ATMs and unique identification (UID) infrastructure once it is established.
According to the minutes of this meet, the government panel entrusted the National Payment Corporation with the task of creating the infrastructure to link the mobile number, UID and this no-frills account. The panel also asked RBI and the Indian Banks Association to jointly work out the modalities for such accounts.
The Union government is also exploring if it can deposit various payments such as those related to the National Rural Employee Guarantee (NREGA) scheme to this no-frills account, the minutes of this meet show.
The panel has representatives from the ministries of home, communications, IT, rural development, posts, finance,social justice & empowerment and women & child development, in addition to representatives from the prime ministers office, Planning Commission, telecoms regulator Trai, railways, UID and the National Informatics Center.
The finance ministry has also sought that RBI relax the know your customer (KYC) norms for opening this mobile-linked no-frills account. It has also proposed that the state government identity card under NREGA be considered as the identifying document for KYC. Cabinet secretary KM Chandrasekhar has asked RBI to fix the upper limit for the transaction fee that mobile companies can charge for financial services.
The committee directed Trai to resolve all issues linked to provisioning and pricing of such services by mobile phone firms. The telecoms department, in consultation with the finance ministry, banks and UID officials, has been framing telecommunication standards for financial services on mobiles.
All these committees will give their recommendations by October-end following which the monitoring group on Usage of mobile phones to deliver basic financial services will finalise the proof of concept by January 2011 so that this initiative can be rolled out in all parts of the country by March 2012.

Economic Times, New Delhi, 26-07-2010