Consumers in India might have to pay fees if they want to manage their bank accounts through their mobile phones, according to a Reserve Bank of India official.
The issue of a fees came up in discussions the central bank had with banks, telecommunication-service operators and the Inter-Ministerial Group in February as they discussed technical costs related to mobile banking, the official, who requested anonymity, tells PaymentsSource.
The government's cabinet secretary formed the Inter-Ministerial Group, which consists of ministers from across various government ministries, in 2009 to look into financial-inclusion opportunities in rural India. In a recent report it submitted to the Telecom Regulatory Authority of India, the group recently recommended that consumers from areas lacking bank access be able to open no-frills accounts linked to their mobile phones (
The ministers generally agree that customers pay a 2% commission to their bank when using a no-frill account, the official says.
In turn, the banks would pay 2.25 rupees (5 U.S. cents or 3.5 euro cents) or 1.4% of the transaction amount, whichever is higher, to the telco, the official says. Increased volume would bring the rate down to 1% “over a period of time, say in five years,” he says. The fees would apply to cash withdrawals and deposits through mobile phones.
If telcos invest in micro-ATMs [handheld terminals to authorize cash disbursements by correspondents], which may use biometric verification using the Aadhaar scheme, then banks would pay them 3 rupees or 2.25% of the transaction, whichever is higher, the official adds.
The central bank will decide on a fee scheme by June this year.
Aadhaar is the brand name of the Unique Identification Authority of India’s citizen identification-number scheme. Under Aadhaar, the authority will provide every resident of India an identification number after they undergo fingerprint, facial recognition and iris scans.
Banks will be able to verify a potential customer’s credentials by matching his identification number and scans against those recorded in Aadhaar records.
“The technology provider, who will assist in setting up the technology link between the bank, the telecom operator and the authority, will be paid a maximum of 1 rupee per transaction by the bank,” the official says.
Earlier this year, Bharti Airtel Ltd., the country’s largest mobile-phone operator, formed a joint venture with State Bank of India, and Vodafone Essar formed a joint venture with ICICI Bank Ltd., to provide mobile-banking and other financial services to the unbanked (
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