Jan. 26: The telecom regulator Trai is trying to cut down the cost of financial transactions over mobile phones. This move is a part of the larger push towards mobile banking, which is aimed at financial inclusion of people outside the regular banking network.
Currently, these tariffs are not being regulated. Two of India’s leading banks — SBI and ICICI Bank — have recently entered into an agreement with Bharti Airtel and Vodafone to use large retail networks of the telecom majors to reach out to new customers in remote areas.
While the move is aimed towards financial inclusion, it could also reduce the cost of the mobile banking. As of now, customers can use mobile phones to transfer up to `5,000 from their bank accounts to recipients, who can accept this transfer either at ATMs or from business correspondents of these banks.
“As the main objective of the provisioning of financial services through mobile phone is financial inclusion, the main beneficiaries of these services are expected to be from rural areas with low income levels. Therefore, efforts must be made to keep the provisioning of the services affordable for the target beneficiaries,” Trai said in a recent consultation paper.
The regulator is toying with the idea of imposing a cap on the tariff that can be charged for these services. Despite the expansion of the banking network during the last four decades, a sizeable proportion of the households, does not have a bank account.
The National Sample Survey data reveals that 51.4 per cent of nearly 89.3 million farmer households do not have access to any institutional credit. Due to tremendous growth of telecom services, a large number of people in rural area have mobile phones even if they don’t have a bank account.