The National Payment Corp. of India on Nov. 23 rolled out its instant interbank mobile fund-transfer service, which enables customers of seven banks in the country to exchange funds to one another.
The authority announced its plans to set up the system in India earlier this year (see story).
The service is available for customers of State Bank of India Ltd., Bank of India Ltd., Union Bank of India Ltd., ICICI Bank Ltd., HDFC Bank Ltd., Axis Bank Ltd. and Yes Bank Ltd., according to National Payment.
Corporation Bank Ltd., Citibank India Pvt. Ltd., Standard Chartered Bank India Pvt. Ltd. and Canara Bank Ltd. are among 22 other banks that also plan to participate.
To use the service, customers register with their banks, which will issue them a seven-digit mobile-money identifier and a mobile-banking PIN. To transfer funds, the sender first must download the mobile-money application and enter the PIN, the beneficiary’s mobile-phone number and mobile-money identifier, and the amount to be sent.
The beneficiary receives a text confirmation when the funds are sent, and he may deposit the funds into his account, withdraw them at an ATM, or approach a business correspondent to secure the cash. A business correspondent is a bank-appointed official who assists customers in performing basic banking functions on mobile terminals, mostly in rural areas.
The Reserve Bank of India permits banks to offer the mobile services to their customers, subject to a daily cap of 50,000 rupees (US$1,095 or 820 euros) per customer.
Customers pay only mobile-operator charges; banks will be offering the service free to customers until March 31, after which they will set a fixed charge.
To boost bank participation in the service, National Payment has halved the fee banks pay to route funds transfers through its switch to 25 paise per transaction, which compares with 50 paise for ATM transactions.
The service supports only funds transfers, but the corporation says it plans to add a payments function in the next year.