The Impact of Mobile Banking in India

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Mobile banking: A technology gradually permeating into the system

Shelley Singh, ET Bureau Dec 11, 2012, 06.30AM IST
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(It's still in its infancy,…)
The question for mobile banking in India is not whether, but when. A string of parallel developments - greater bank innovation, broadband spread and user inclination - is providing new charge to mobile banking. There is still a long way to go before m-banking achieves mass acceptance, but it's on its way, reports ET.
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Last month, HDFC bank, India's second-largest private-sector bank, launched two services on its mobile banking platform. The first was a Hindi banking service, which made accessible its 30-odd m-banking services-like transferring funds, stop-cheque requests and opening a fixed deposit-to account holders who prefer Hindi as a medium of communication.

The second was a feature called 'net safe light', which limits damages from credit-card misuse. An account holder with a credit-card limit of, say, Rs 5 lakh might hesitate to make a purchase of Rs 2,000 via mbanking. This new feature lets the account holder create a virtual credit card on the mobile for the transaction value-in this case, Rs 2,000.

This is a fair leap from where m-banking was when it started in India about five years ago-text alerts for cheque deposited or ATM withdrawals. The way the m-banking ecosystem is evolving, and the numbers they are adding, indicate banks in India are going mobile at a speed never seen before.

Sure, the small base exaggerates the change, but it is significant in that it shows a technology gradually permeating into the system. "There's an opportunity to leapfrog: take banking to the masses via mobile banking," says AP Hota, managing director & CEO, National Payments Corporation of India (NPCI), which, among other things, sews up back-end connections to enable m-banking.

Of its total customer base of 200 million, State Bank of India (SBI), the

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