Archive for: India
by Jim Rosenberg: Tuesday, March 31, 2009
Greg Chen represents CGAP in the South Asia region. Recently he visited a new and innovative microfinance institution (MFI) that has begun operations over the last year or so.
India has 850 million people who live on less than $2 per day. There is strong government interest in expanding financial services, an active microfinance sector, and fast-evolving business and technology sectors.
When it comes to microfinance, information systems are critical to stronger internal controls (over cash flow, financial reporting, portfolio quality, etc.). You can see this in action at Equitas, a new MFI which has more than 200,000 borrowers and follows the Grameen style of group-based lending model.
Read the rest of this page »
by Mark Pickens: Wednesday, March 11, 2009
To promote effective regulation of mobile banking, CGAP, DFID, and the Alliance for Financial Inclusion (AFI) have organized this week’s second Global Leadership Seminar for high-level policymakers and regulators who set policy for branchless banking, including mobile banking. CGAP’s Technology Program and AFI are supported by the Bill & Melinda Gates Foundation.
The proper role of nonbanks in branchless banking bedevils regulators and industry alike. The central bank of the Philippines just released new regulations creating an e-money license. In recent months, Kenya has seen a wave of complaints from banks about the success of Safaricom’s M-PESA service and whether or not it constitutes un-regulated banking. Regulators in some countries — India, prominently — have made clear statements that banks should take the leading role (for example, see RBI’s mobile banking guidelines).
Read the rest of this page »
by Jim Rosenberg: Tuesday, October 21, 2008
Recently we spoke with Naushad Contractor about India’s mobile banking trends. A payments professional with over 12 years experience across geographies, Naushad heads marketing for mobile commerce at Vodafone Essar ltd., India. He is also on the regulatory committee of the Mobile Payments Forum of India.
Part of e-Businesses success stories, he has played a key role in launching India’s first eWallet and was a member of the core team that launched and made Remit2India.com the World’s No.1 Independent Money Transfer Portal for Non Resident Indians.
Q: Is mobile banking popular or hyped?
I think Mobile Banking is increasingly becoming popular but it is much more hyped than it is popular. Everyone says “I Do” but actually not many actually do as they say. However, the factor of sheer convenience for the customer and lower transaction costs for the banks is creating a conducive pull + push environment for increasing understanding and usage of this relatively new concept. As in the early days of internet banking, most people will tend to use mobile banking just as an information tool rather than conducting too many transactions on the mobile. Even the initial transactions will be much lower in value. Once trust in mobile banking increases as a result of good user experience, both usage and transaction values will begin to normalize.
Read the rest of this page »
by Kabir Kumar: Wednesday, October 8, 2008
I have been tracking the mobile banking/branchless banking space in India for a few years - since the business correspondent guidelines were issued. India drafted those guidelines in the spirit of significantly ramping-up access to finance for poor people. The guidelines put Indians in the lead on branchless banking regulation in the South Asia region. Two years have passed and we have yet to see those guidelines translate into a dramatic change in the access to financial services picture in India. There are new companies and more experimentation with correspondents and innovative solution providers but banks have simply not been aggressive about pursuing branchless channels.
The Reserve Bank of India issued final mobile banking guidelines on Wednesday and banks are again front and center. Should we expect these guidelines to dramatically alter the picture of financial access in India? Are the unbanked winners or losers? Well….
Read the rest of this page »
by Mark Pickens: Monday, August 18, 2008
Mobile operators have notched some high profile successes in offering financial services to the poor. Think M-PESA in Kenya or GCash and Smart Money in the Philippines. They’ve have logged several million users for their mobile money transfer services which appear cheaper and more convenient than traditional banking products.
Will banks respond by emulating their new competitors from the mobile world? Banks have an appetite for offering multiple products to their clients, so it would be a boon to the poor if banks wanted to ramp up their offerings via new electronic channels. But the emerging picture is not always rosy.
Many banks see mobile as merely a threat, according to IFC’s Andi Dervishi, who leads investments in alternative-payments systems for the IFC. “Banks remain conservative. They don’t see this as a big opportunity. They are taking a more defensive position, rather than offensive, and not really going after the customer. Their business model needs to be changed.” Countries like India, China, Brazil and Russia now have more mobile phones than ATMs, giving rise to the notion that mobile will support the next wave of innovation in banking in emerging markets where low-revenue customers means banks need to find low-cost channels. But instead of jumping to explore, most banks are playing defense.
Read the rest of this page »
by Mark Pickens: Wednesday, July 23, 2008
Yesterday, the Reserve Bank of India (RBI) cautioned banks which have started offering mobile payment services to put a hold on such services until final Operative Guidelines are issued by RBI.
A draft set of mobile banking Guidelines were issued for comment in June, but are still in development. RBI signaled several times in the prior year that it planned to look in earnest at mobile financial services.
CGAP’s Notes on Regulation of Branchless Banking in India took stock of the situation earlier this year.
July 25 UPDATE: RBI has announced it will issue final m-banking guidelines within 2 weeks.
by Jim Rosenberg: Thursday, June 12, 2008
The Reserve Bank of India issued draft guidelines on mobile banking today. They are accepting comments through June 30.
Here is a report from the Business Standard on the move. Excerpt:
The wait for rolling out mobile banking seems to be over, with the Reserve Bank of India’s (RBI) issuing draft operative norms for such payment system. Now, RBI said, it will be easier and safer to use mobile phones for carrying out a gamut of banking transactions.
Banks can offer mobile-based services only to their own customers. Banks should have a system of registration before commencing mobile-based payment service to a customer, RBI said.
by Mark Pickens: Wednesday, March 26, 2008
 Mobile operators find navigating financial regulation isn’t quite so easy as sailing through the telco world.
If they want to convince central bankers that hold the keys to the payments space, mobile operators will make persuasive arguments about how mobile financial services meet traditional thinking about deposits, the new domain of payment system regulation, and the hot button issue of anti-money laundering, especially when sending money across borders.
No operator better illustrates this than Vodafone and its M-PESA money transfer service. Read the rest of this page »
by Mark Pickens: Wednesday, February 27, 2008
 RBI Executive Director R B Barman said this week that a central bank committee is examining the regulatory challenges raised by mobile banking. The committee is expected to report recommendations next month, leading next to RBI drafting the requisite changes to the country’s regulatory framework.
The report is the latest or progressively more encouraging signs from RBI that it plans to provide additional guidance for mobile banking to take off. In its Financial Sector Technology Vision document, released in October, RBI indicated it sees high potential for electronic banking to increase efficiency in retail banking. But RBI is also concerned about mobile security, particularly authenticating users accessing bank accounts remotely.
RBI is also closely watching several pilot schemes using mobile connectivity to improve access to financial services among low-income Indians. As the Economist reported earlier this month, one program in Andhra Pradesh is testing how to deliver pensions and unemployment benefits to around half a million people in villages, via specially-equipped mobile phones in the hands of local payment agents and smart cards issued to recipients. A parallel POS-based system is also being tested. So far, 40,000 cards have been issued.
What’s not yet clear is whether RBI guidance on mobile phone banking will be mostly concerned with mainstream banks providing mobile as an additional channel for current customers, or whether RBI will extend permission to some more far-reaching initiatives. Will mobile operators get a window to become licensed to provide electronic wallets for international remittances, bill payments and other payment services?
The G2P pilot in Andhra Pradesh also makes extensive use of local payment agents, and we understand at least some of these to be local merchants. In rural areas, its often the local store owner who has enough liquidity to pay out cash on the government’s behalf. But so far, RBI regulation on outsourcing doesn’t provide clear permission for banks, microfinance institutions or mobile operators to follow suit and use local merchants to extend banking services in places where bank branches may otherwise be too expensive to build. Will RBI make regulatory changes on issues like this, too?
|
 |
|
