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Mobile banking by business Correspondents in india – a landsCape

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  • Mobile banking by business Correspondents

    in india a landsCape study

    germancooperationDEUTSCHE ZUSAMMENARBEIT

    `

  • Published bydeutsche Gesellschaft fr internationale Zusammenarbeit (GiZ) Gmbh

    GiZ NAbARd Rural Financial institutions Programme

    CoNtACtdr detlev holloh

    A-2/18, 4th Floor, safdarjung enclave, New delhi 110 029 / iNdiA

    Phone: +91-11-4949 5353telefax: +91-11-4949 5393

    AuthoRM/s indev Advisors

    ResPoNsibleAbhishek lahiri

    editoRNitin Jindal

    teChNiCAl iNPuts/ Reviewsunil Aggarwal, Abhishek lahiri

    ARt diReCtoRAnshul sharma/Artworkstudios.in

    New delhi, oCtobeR, 2014

    germancooperationDEUTSCHE ZUSAMMENARBEIT

    disClAiMeRThe opinions and analyses expressed in this report do not necessarily reflect the views and official policies of the GIZ NAbARd Rural Financial institutions Programme.

  • Mobile banking by business Correspondents

    in india a landsCape study

  • Mobile phone subscribers in the coun-try exceed 870 million which is clearly indicative of the power of mobile communication. It is the cheapest mode of communication which has helped even the poor people to own a mobile phone. The banking industry has embarked upon big plans to lever-age it to provide banking services on the move and to expand banking to every nook and corner of the country. Banks have also realized its po-tential to significantly reduce the cost of banking transactions. It is a win-win situation for all the stakeholders and therefore it is bound to be the mode of banking for the bulk of banks customers in the times to come.

    Most of the commercial banks have already launched mobile banking. The number of trans-actions has been growing rapidly. The instant transfer of funds across banks through Immediate Payment System (IMPS) platform of National Pay-

    M banking transactions

    prefaCe

    Month No. of Transactions Amount (Rs in lacs)

    December 2013 88,92,790 2,26,130

    June 2014 107,28,715 3,98,532

    Growth 20% 76%

    * Inter-bank + Intra-bank Source: National Payment Corporation of India

    ment Corporation of India (NPCI) has further given it a fillip.It is now high time for the rural and cooperative banks to join the bandwagon lest they may miss the opportunity.

    With a view to examine the scope of introducing mo-bile banking in the rural/cooperative banking sector and understand the associated challenges, GIZ NA-BARD RFIP commissioned the services of a consult-ing firm to study the Mobile Banking environment in India and explore suitable options for rural/coopera-tive banks. The agency submitted its report in early 2014 after which some of these mobile based service providers made presentation to NABARD.

    The report provides a summary of the salient fea-tures of the mobile banking (m-banking) market in India. It also documents some key initiatives taken in the sector and recommends initiatives that need further study and deep dive analysis.

  • RuRal Financial institutions PRogRamme 5

    MoBIle BANkING By BuSINeSS CoRReSPoNDeNTS IN INDIA A lANDSCAPe STuDy

    The report further contains details of learnings from the study of initiatives recommended in first phase. It captures details of requirements, technology, op-erational and financial considerations of such solu-tions and initiatives for feeding into the design of new pilot projects with RRBs and Cooperative Banks.

    Methodology

    The findings are based on the data gathered from a variety of sources including field visits to customer service providers/outlets, meetings with technology providers and BC companies, meetings with bank officials, meetings with NPCI along with a structured Request for Information (RFI) that was used to col-late information regarding the solutions implement-ed and technology platforms used by the shortlisted vendors.

    The report has the following key sections:

    Disclaimer: The information in the report is based on market information as provided by the institutions participating in the RFI (request for information). GIZ is not responsible for any error/discrepancy in the data.

    Section 1 Market Landscape: It covers the sta-tus of the market in terms of prominence vis--vis other forms of banking, growth rate, key players, customer preference regarding type of transaction, regulations, settlement systems, and available technology.

    Section 2 discusses the various models in mo-bile banking

    Section 3 Initiative Profiles: It contains profile of a few key initiatives in this market and discusses key factors for success.

    Section 4 Recommendations for deeper study of 4 Mobile Banking successful initiatives exist-ing in the domain, with a view to outline poten-tial steps to be taken to support mobile-banking initiatives of Regional Rural Banks (RRBs)/Coop-erative Banks.

    Section 5 contains a summary of the shortlisted initiatives

    Annexure 1 details the implementation process for a mobile banking solution

  • MoBIle BANkING By BuSINeSS CoRReSPoNDeNTS IN INDIA A lANDSCAPe STuDy

    1. MARKET LANDSCAPE .......................................................................................81.1 overview ................................................................................................................................. 81.2 M-Banking Size and Growth ............................................................................................ 111.3 Types of Transactions.......................................................................................................... 111.4 key Banking Players ............................................................................................................ 121.5 key Stakeholders in M-Banking ecosystem ................................................................ 121.6 High Potential Market Size of M-Banking ................................................................... 131.7 Regulations ............................................................................................................................ 161.8 Settlement Systems ............................................................................................................ 171.9 M-Banking user Technology ............................................................................................ 20

    2. MODELS IN MOBILE BANKING ........................................................................222.1 Self and Assisted Transactions......................................................................................... 232.2 Remittances ........................................................................................................................... 242.3 Multiple Mobile Modes ...................................................................................................... 242.4 Mobile Banking Models ..................................................................................................... 24

    3. INITIATIvE PROfILES .......................................................................................263.1 FINo / Alpha Payment Service ........................................................................................ 273.2 oxigen ...................................................................................................................................... 283.3 eko ............................................................................................................................................. 293.4 Mobile kisan Credit Card (mkCC) ................................................................................... 303.5 Indusind Cash-In-Mobile ................................................................................................... 313.6 Federal Bank IMPS ............................................................................................................... 32

    Contents

  • MoBIle BANkING By BuSINeSS CoRReSPoNDeNTS IN INDIA A lANDSCAPe STuDy

    3.7 SBI and BSNl Mobile Banking ......................................................................................... 323.8 Airtel Money .......................................................................................................................... 333.9 Idea Mycash ........................................................................................................................... 343.10 Vodafone M-Pesa ................................................................................................................. 353.11 IFMR Mobile Banking ......................................................................................................... 363.12 BASIx Sub-k: .......................................................................................................................... 373.13 Itzcash ...................................................................................................................................... 383.14 yeS Money .............................................................................................................................. 39

    4. RECOMMENDATIONS ......................................................................................40

    5. ANALySIS Of SELECTED INITIATIvES ..........................................................425.1 eko ............................................................................................................................................. 425.2 Mobile kisan Credit Card (mkCC) ................................................................................... 435.3 IMPS Initiatives Group ........................................................................................................ 445.4 BASIx Sub-k ...........................................................

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