Dial a code and get balance enquiry

In a move that could save banks crores of rupees every year, the National Payment Corporation of India (NPCI) has mooted a system where non-financial transactions like balance enquiry could be moved out of bank ATMs to mobile phones. National Payments Corporation of India is in talks with mobile companies to facilitate banking transactions through USSD (unstructured supplementary service data) messages. USSD messages are at present used by mobile companies to enable users check pre-paid balances and get information on offers by dialing a specific code. USSD messages are exchanged over a real-time connection with the telecom company's server and are therefore faster and more responsive than SMS queries. NPCI, a body promoted by banks at the instance of Reserve Bank of India, has taken over the backbone of all electronic payment transactions from an arm of RBI. It is also plays the role of the facilitator in India's Interbank Mobile Payment System (IMPS). Speaking at the Economic Times Bank Technology Summit here on Thursday, A P Hota, MD NPCI, said that each day around 1.5 million balance enquiry transactions are conducted daily through third-party ATMs. "These transactions are free for the customer if it is within the five transactions a month limit. But their banks have to pay the bank that owns the ATM between Rs 5 to Rs 8 for every enquiry," said Hota. He added that there are 20 to 25 transactions that are available on ATMs and if all non-financial transactions can be moved out of ATMs to mobile phones banks could save substantially on their costs. "We need to leverage mobile technology and increase awareness and discourage balance enquiry at ATMs," he said. Although there is no move to change the present system of five free transactions, it is expected that the convenience of mobile queries would reduce the burden on the 86,000 ATMs in the country. At present, mobile banking is largely undertaken by customers registered for IMPS through mobile banking applications on smart phones. Although 28 banks and 11 million customers are registered for mobile banking, the number of transactions taking place on this platform is miniscule. According to Hota, this was because most urban customers are already access accounts online through the internet. "We need to provide online access to those who are not networked. For this it was necessary to facilitate mobile banking on the most basic phones," he said. Speaking at the summit, M V Nair, chairman, Union Bank, said that mobile banking was expected to be the dominant channel for banking transactions in eight years although it accounted for less than on1% of transaction at present.

Now, it's time for mobile banking

After phone and Net Banking, technology is heralding the era of mobile banking in India. Your mobile can now facilitate various financial transactions that are available through Net Banking. More so, with India all set to emerge as the second largest mobile subscriber base in the world after China, telecom operators and banks are raring to use this medium to offer banking services including fund transfers. HDFC Bank announced on Tuesday that it had become the first bank to offer a full suite of banking and commerce services over the mobile phones including fund transfers. Under this, HDFC customers who have registered for fund transfer facility under the bank's Net Banking services can download the ngpay - a leading mobile commerce network with which HDFC Bank has a tie-up - application and begin transferring funds immediately. Fund transfer will happen in realtime between two HDFC Bank accounts and within 48 hours when transferring to a non-HDFC Bank account. Other banks like SBI, ICICI Bank, Axis Bank and Corporation Bank are in an advanced stage of using mobile phones for offering banking services. H N Sinor, chief executive of the Indian Banks' Association (IBA), said: "RBI is coming out with proper guidelines on mobile banking in June. Meanwhile, many banks and telecom operators are experimenting with various technologies to bring banking services closer to the people. Soon, one may see mobile phones turning into handheld ATMs in India.

SBI to finally launch mobile banking

State Bank of India (SBI) will open 101 branches running core banking solution (CBS) on July 1, its foundation day. SBI also plans to launch mobile banking the same day, sources told ET. This will make it the first state-owned bank to offer mobile banking. The branches will be opened by finance minister P Chidambaram in New Delhi. Representatives of the new branches will participate via a videoconference. SBI has 10,100 of its 10,385 branches running CBS -- where branches are networked to enable a customer to access his account from any SBI branch. If SBI can reach even half of its customer base of 1.3 crore, it will emerge as the biggest player in mobile banking. The move comes close on the heels of the RBI releasing draft guidelines on mobile payment. SBI, which bought its M-banking application from Spanco Telesystems, has been running internal pilots. "So far, it was offered only for staff to familiarise them with the product for effective marketing," said an SBI official. Besides balance inquiries and transaction alerts, SBI's M-banking will help users transfer funds up to Rs 1,500. The operator-independent service can be used to pay utility bills and will work on most of the basic handsets. RBI has mandated that M-banking service must work on all mobile operators and use SMS as a medium for transactions. Many private banks offering M-banking will have to tweak their service to comply with the regulation. "Looking at the huge and diverse customer base of SBI, we have developed a solution which will work across mobile operators and support various methods of communication," said Spanco Telesystems vice president (technology) Kamal Maheshwari, the company that has developed the solution for SBI. "Going forward, we plan to add mobile wallet and merchant payment options to the system, which will virtually replace debit and credit cards with the phone," added Maheshwari.

India wakes up to mobile banking

India is witnessing a new dawn of banking with mobile phone. From a rickshaw puller, a florist, a pan shop vendor to a truck driver, cash transactions are going mobile for all and sundry. "Our target is to achieve 10 million mobile subscribers hooked onto mobile banking by end of this fiscal year," says Bharti Airtel CEO Manoj Kohli. Four banks SBI, HDFC, ICICI and Corporation Bank have partnered with India's largest operator Bharti Airtel to offer m-banking. RCom has tied up with ICICI Bank, HDFC Bank, Axis Bank and IDBI Bank. Bharti Airtel has launched its mobile banking late last month and plans to rope in about 100 major banks in India by end 2008. "Over the coming months, customers will be available to open their bank accounts at authorized Airtel outlets just by submitting a photo ID proof. Subscribers can now deposit, withdraw, transfer, pay bills or remit money through their mobile phones," Kohli adds. A pilot phase has already been successful between HDFC and Bharti Airtel in West Delhi. Chemist shops, general stores, residents, NGOs, anybody can register to become an authorized outlet. ET spent a day with one such outlet - Gupta Medicals doubling as an authorized mobile banking outlet in West Delhi to find out how the system works. A customer (Kamla) comes to the shop in immediate need of Rs 200. She comes to the outlet and asks for withdrawal from her mobile bank account. Sumit Gupta, the outlet owner SMSs from Kamla's mobile phone the following code "* 543*123*(the outlet's mobile number)* 200* and Kamla's 10-digit Pin code". He sends the SMS to 54321. Instantly, Rs 200 get deposited into the outlet's account withdrawn from Kamla's HDFC account. Gupta hands over Rs 200 to Kamla with which she goes and buys fresh flowers for garlands. The transaction takes less than five minutes. In order to confirm the transaction, HDFC bank sends an SMS to Kamla's phone: "Balance in your HDFC account as of 3/7/2008 is INR 900." Kamla's account is a no frills account. To graduate to a savings bank account she will have to submit additional documents. For remitting to India, one can just go to a Western Union (WU) outlet overseas and deposit forex. Instantly, a transaction ID will be generated on the receiver's mobile which he can show to collect the amount at a WU outlet in India. While the SMS is free, for a person-to-person transfer, a fee of Rs 20 is charged which is shared amongst Airtel, VISA, Mchek (platform provider) and others in the chain. Airtel CEO Manoj Kohli declined to disclose the revenue share arrangements. With Mobile Money Transfer (MMT), the user can transfer funds to a mobile number that is registered with mChek with a valid VISA card or to any 16digit VISA card number in the country. About Rs 20 is charged for a card-to-card transfer.

In its draft guidelines last month, the RBI has mandated to implement a minimum four digit mPIN for such transactions. However banks like HDFC have gone ahead and implemented a six digit mPIN. ICICI's Sachin Khandelwal terms mobile phone as more secure as in case of loss of a phone, there's no way a person can use your cash. "In comparison, during loss of a card, there is always a risk of leakage," he adds. The SMS receipt can also be treated as a legal document under the new IT Act. Overall, while operators seem gung-ho on the service, it remains to be seen how much popularity mobile banking will find amongst India's 270 million odd mobile subscribers and whether it will encourage 90 per cent of the population which uses no bank to open a bank account.

Bank to offer mobile banking facilities

The Vijaya Bank will go a step ahead in providing trendy services to its customers through the mobile banking facility, scheduled for launch on September 29. Disclosing this to reporters here on Wednesday, the bank's chairman and managing director Albert Tauro said they are hoping that at least 10,000 of its customers get registered for the new facility before the launch. He said Vijaya Bank will be the second nationalized bank to launch such a facility, after Union Bank of India. Explaining the bank's expansion plans, Tauro said the bank will have 1,200 branches across India by March 2010 from the existing 1,111. The number of Automatic Teller Machines (ATMs) will also be increased from 372 to 500 by then. He said in Karnataka, it has 445 branches with Rs 12,000-crore deposits out of which 80% (Rs 9,000 crore) are advances. He said the bank records an annual growth of 17% in Current Account Savings Account (CASA). They aim to increase it to 25% during this fiscal. Regarding the growth in lending, he said the bank has registered an annual growth of 33% in education and jewel loans while the growth in agriculture loan is 42%. About the quality of services being provided to its customers, Tauro said the bank has achieved 100% core-banking facility. He said the bank offers a complete range of facilities besides the online banking facility. He said over 1.80 lakh customers are using the recently launched SMSalert facility. Festive offer Vijaya Bank has announced festive offer on housing and auto loans from September 15. For housing loan, the interest rate for first one year will be 8.5%; for second year, it will be 9.25%, and then it will be 10.30%. For auto loans, the interest rate will be 8.5% for the first two years.

How to avoid mobile banking fraud

The mobile phone culture is growing and has penetrated the urban and semi-urban population in India. The number of mobile users is estimated to have far surpassed the number of Internet users. In the same order, mobile banking is getting wider acceptance, but the convenience it offers has its own share of risk. It is therefore even more important to be aware of the safeguards for the secure usage of this medium for financial transactions. Use the phone-lock function on your mobile device when it is not in use. Choose passwords which are difficult to crack and keep them safe. Strong passwords have eight characters or more and use a combination of letters, numerals and symbols. Never disclose via text message any personal information (account numbers, passwords or any combination of sensitive information like your PAN card, birth date, etc that could be used for identity theft). Make sure your phone is configured securely, especially when it comes to configuring the Web browser and email software. Security and privacy settings can be configured without any special expertise, simply by using the 'Help' feature of the software, or visiting the vendor's website. Protect the phone with security software, including a software firewall and antivirus protection. Download files only from a trusted source. Also, make sure the Bluetooth is switched off while not in use to avoid viruses. Before letting someone else have access to your device (lending it to another person, discarding, or selling your mobile device) ensure that you have deleted all personal account information. Keep the device always up-to-date with the latest patches and updates including antivirus updates.

Banks, telcos join hands for mobile banking

A year after RBI finalized its mobile banking guidelines, two of the country's largest banks have tied up with two telecom giants to provide mobile banking services across the country. SBI joined hands with Bharti to set up a JV company, which will become a business correspondent of SBI and extend mobile banking service to the unbanked using Vodafone's mobile services as a platform. ICICI Bank has tied up with Vodafone Essar whereby both entities will offer a bouquet of financial products such as savings accounts, pre-paid instruments and credit products through a mobile phone based platform. SBI chairman O P Bhat said the partners would invest Rs 100 crore in the firm. He said the objective of the tie-up was to provide banking services to those who are presently outside the reach of banking. In December 2009, RBI modified mobile banking norms by raising the daily transaction limit to Rs 50,000 for transfers and Rs 10,000 for transactions involving purchase of goods and services.

Now, village gets mobile banking service

Mobile banking services which was being concentrated in the urban areas of Karnataka till now, is being extended to rural areas also, taking rural masses towards economic empowerment. For the first time in the state, the Reserve Bank of India has extended its mobile banking services to Harwada village in Ankola taluk through the Syndicate Bank. Harwada is mainly dominated by the fishermen community and all its 1,200 families residing in this village can avail the banking service. With this facility, the villagers of Harwada have become customers of Syndicate Bank, said bank officials. Now, villagers can debit or credit the money in their village to the bank accounts, which will be managed through a small machine. Lakshmi Kubal has been appointed business correspondent of the Syndicate Bank for this and will manage the work with the help of the machine. The machine, which is like a small ATM, works with the help of a satellite controlled mobile SIM card. The thumb impression or biometric system will play the main role in identifying the account holder and is a fool-proof system, manufactured by a Bangalore-based company, Integra. The every day business transactions will be transferred to the head office of Syndicate Bank and recorded daily. M P Kamat, manager of Syndicate Bank, Avarsa, said the RBI has introduced this system mainly to make it easy for rural women financially and avoid visiting distant bank branches every day. They can make transactions from Rs 20 to Rs 2,000 per day and there are plans to increase the amount to Rs 5,000 per day, said Kamat. He said the service will be extended to Sakalabena village in Ankola taluk in the second phase. In the coming days the bank will extended the benefit of loan repayment through this machine, he added.

After Internet Banking, Mobile Banking or M-Banking has become the buzz word in the industry. It's a fact that Internet Banking has given a boost and has shown a successful way to consider it as a good alternative procedure against physical branch banking. Now where ever you are, you can access your bank account and you can do lot more things like checking your account balance, transfer money to some other account, pay your utility bills online and so on, just by comfortably sitting at your home or office. But, the technical disadvantage of Internet Banking is, you have to have internet connectivity and a computer. Definitely it's not a big hindrance in US or Europe or in the other developed countries, but if one considers the developing economies, then it's a genuine problem and more specifically in the tier II cities. And here Mobile Banking comes into the picture to address the basic limitation of Internet Banking. If we only consider Asian developing countries, the availability of mobile connectivity is really huge. Where one may not find out a landline telephone or an internet connection, but still in those remote places getting mobile connectivity is not a major issue today. So, Mobile Banking has given the traditional banking a newer look "Anywhere Banking". Now you don't need a PC or a laptop with internet connectivity, just you need your cell phone with you. Considering the Asian economy countries like China, India and Korea have seen the mobile boom in last one decade. A projected value of mobile connectivity in India shows that it will touch 180 Million subscribers by the end of 2008, where it was pegged at around 2

Million in the year 2000. In Korea, more than 70% of the entire population is carrying mobile devices. The biggest advantage Mobile Banking provides to the banks is that it helps to cut down the costs as it's even more economic than providing tele-banking facilities where banks have to keep hundreds of telecallers. Additionally, Mobile Banking helps banks to upgrade the quality of services and nature of customer relationship management. Using Mobile Banking, banks can communicate to the defined cluster of clients. The offers can be customized and this personalization can give the banking industry a huge mileage, even at a lower cost. Again, using the same mobile channels, banks can up-sell and cross-sell their highly complex financial products to the specific set of customers which can be coupled with the selling strategies of Credit Cards, Home Loans and Personal Loans etc. On the contrary, the service providers can also accrue more business by providing the Mobile Banking services to their clients. Countries like Japan, Korea or Singapore where the mobile connectivity has already reached its saturation, the service providers can make handsome business by providing additional banking services to the same static client base. In the services front, different banking services can be provided, depending upon the banking regulations in respective countries which may include Account Balance Enquiry, Account Statement Enquiry, Credit/Debit Alerts, Bill Payment Alerts, Cheque Book Requisition, Transaction History, Minimum Balance Alerts, Fund Transfer Facilities, etc.

Mobile Banking activities can be categorized in two different manners. 1.By the Nature of Service: It can be any of the two, either Enquiry Based or Transaction Based. For example, Account Balance Enquiry or a Cheque Book Requisition can be the good examples of Enquiry Based Services where a Fund Transfer or a Bill Payment is a Transaction Based activity. 2.Depending on the Originator: Again there can be two different types of services; Push and Pull, depending on the nature of the originator. A Push based service is from the Bank to the Client and vice versa. For example, Bill Payment Alert can be a Push based service, when getting Recent Account History is a Pull based one. In different countries, Mobile Banking has already gained its popularity. For example, in the South Korean market LG Telecom teamed up with Kookmin Bank to provide their Mobile Banking services in 2004 and since then they have seen a nice and steady growth. In India, Reliance Infocomm has started providing Mobile banking services to ICICI Bank and HDFC Bank through their R-World environment. The Mobile Banking services will become more popular once the availability of the smart phones or PDA phones shall increase as Smart Phones come with larger screens and bigger memory size. In the application development front, both J2ME and BREW have done excellent work and industry expects by the year 2012, more than 80%

of the mobile handsets will be able to run stand alone Mobile Banking applications and that time it will be "Anywhere Banking" in real sense.