Mobile banking has failed to take off in India: RBI.

The Reserve Bank of India (RBI) deputy governor H R Khan has hinted that mobile banking has failed take-off in India and hence has called upon banks and mobile companies to work together for the benefit of their customers. At a seminar in Bhubaneswar, Khan said that the growth rate in the value and the volume of mobile based transaction is much lower compared to the number of bank accounts and number of mobile subscribers.

Mobile banking transactions are transactions where customers undertake banking transactions using mobile phones involving credit or debit to their accounts.

This, he said, indicates that that banks are yet to fully exploit this technology even for their existing customers. In May 2012, close to 3.34 mn transactions were concluded for Rs 2.86 bn through mobile as against Rs 1.28 mn transactions of Rs 0.91 bn in May 2011. "This growth rate is low compared to the number of bank accounts and the vast mobile subscriber base of more than 900 mn," said Khan.

He said that Reserve Bank has provided the policy framework for a collaborative relationship between the banks and mobile network operators but 'the results of this collaboration are not yet fully visible.' He said that some of the reasons which have been flagged relates to ownership of the customer, control of transactions and developing an appropriate revenue sharing model.

"The need of the hour, therefore, is that the banks and the mobile operators reach a workable understanding while protecting their mutual interests. Such an approach would result in a "win-win" situation for both and, more importantly, serve the larger cause of public good of financial inclusion," he said.

With rapid growth mobile phone subscribers banks have sough collaboration with telecom operators to develop an alternate channel of delivery of banking services. The

RBI allowed bank-led mobile banking model considering the diversity of network providers in India, remittance centric approach of such model and KYC related concerns. As on May 31, 2012, RBI had permitted 69 banks to provide mobile banking services to their customers.