Mobile Banking 3h831

EXECUTIVE SUMMARY Mobile banking is a system that allows customers of a financial institution to conduct a number of financial transactions through a mobile device such as a mobile phone or personal digital assistant.There are three types of mobile banking technology used.They are receive and send data via text messaging, web browsers and smart phone applications.The mobile banking services are funds transfer of inter bank and intra bank, balance enquiry services, request services like cheque book, bill payments and credit card payments, demat services, mobile top up ,merchant payment, life insurance and stop payment instructions. The mobile banking service is benefitted to the customers and thebanks. The customers benefits are the funds or the banking transactions can be done without visiting the bank and there is no need of internet facility. It is also more secure than online banking. Any transactions taken is immediately made noticed to the customers thus reducing the frauds. It is cost saving to banks thus helps them to give more attention to their loyal customers and can perform better customer relationship. The mobile banking also has its other side of the coin. The banks charge the customers for providing them this service thus increasing their expense. The customers cannot do much transaction due to limit on the transaction. The profit earned by the banks is low due to increase in the expense in providing the service. The disadvantage of development in mobile banking is handset operability, security, reliability and scalability, application distribution and personalization. The precaution to be taken before using mobile banking are see that the mobile banking is activated the auto lock, keep the confidential details are not disclosed, those sites which is a trustworthy and keep the Bluetooth always switched off because virus can destroy it. There are some precautions to be taken by the customers before availing mobile banking service. The mobile phone should be on auto lock activated and the bluetooth should not be always kept on. The confidential information should not be disclosed.

The RBI has also given some guidelines on mobile banking. All banks have to follow all rules and regulations led by RBI. In the recent years it has seen a tremendous growth in the mobile banking service. INDEX

Chapter 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Particulars Preface Introduction And Meaning History And Meaning Features Of Mobile Banking Types Of Technology Working Of Mobile Banking Services Of Mobile Banking Advantages And Disadvantages Disadvantages In Development Of Mobile Banking Precautions To Be Taken Mobile Banking Services Offered By SBI And BOB Mobile Banking Guidelines By RBI Status And Latest Trends Mobile Banking On Rise In India Role In Small Scale Agriculture Future Of Mobile Banking Case Study Conclusion Visit Report Bibliography Webliography Annexure

PREFACE Mobile banking is enjoying a rapid growth in India. It has successfully crossed the introduction stage. The service is being channelised from metropolitan cities to urban areas and semi urban areas and then to the rural areas. The customers select those banks that are near to their homes and workplaces. mobile banking has helped these customers.The growth of mobile banking in India is primarily forced by convenience and promptness. Indian banking industry has already witnessed two more revolutions in the improvement in the quality of services delivery as Internet banking and ATMs. Among these innovations mobile banking has given the more convenient to their customers than any other services. has really become multi beneficial. It has helped to maintain good relations with their customers. OBJECTIVES: 1. To study the concept and meaning of mobile banking 2. To study its types and working 3. To study the services offered by banks 4. To study advantages and disadvantages 5. To study the guidelines provided by RBI 6. To study the status and trends RESEARCH METHODOLOGY: Primary data: The primary data is obtained from Mr. S.N.Mohinte, the manager of Indian Overseas Bank. Secondary data: The secondary data is obtained from the books ,internet, web browsers, newspapers,etc.

CHAPTER 1

INTRODUCTION After Internet Banking, Mobile Banking or M-Banking has become the buzz word in the industry. It is 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 we are, we can access our bank and we can do lot more things like checking our balance, transfer money to some other , pay our utility bills online and so on, just by comfortably sitting at our home or office. But, the technical disadvantage of Internet Banking is, we 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 thetierIIcities. 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 we do not need a PC or a laptop with internet connectivity, just we need our cell phone with us. 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. Mobile banking is one of the three major pillars (with ATMs and Internet Banking) of revolutionary improvement in the quality of service delivery of banks. Mobile banking is simply performing banking transactions such as balance checks, transactions,

payments with the help of mobile phone. It can also be understood as availing banking and financial services with the help of mobile telecommunication device. The scope of services offered in mobile banking may include getting information, transferring funds, sending checkbook request managing deposits, taking quick check of transactions and so on. Mobile banking today is most often performed by SMS (Short Message Service) so that is also known as SMS banking. The welcome of this type of service is very much expected by youth. Indian youth has taken it as a fun of convenience. However mobile banking in India has been used by others also. The very feature of mobile banking „AnytimeAnywhere Banking‟ is making it very popular among all the categories. Using mobile phones is a very common practice. Commercial banks are exploring this opportunity to make their services more convenient for their customers. Growing number of mobile subscribers in the country is the most valuable behind the success of mobile banking.

MEANING : Mobile banking simply means performing banking transactions through mobile. Presently it is enjoying rapid growth. This has raised certain challenges such as security, reliability and consistency in services to meet customers‘ expectations. Instead of this the future of mobile banks looks bright due to the continuous increase in customers‘ awareness and effectiveness of banking and regulatory system. Mobile banking is a system that allows customers of a financial institution to conduct a number of financial transactions through a mobile device such as a mobile phone or personal digital assistant. Mobile banking differs from mobile payments, which involve the use of a mobile device to pay for goods or services either at the point of sale or remotely to the use of a debit or credit card to effect an EFTPOS (Electronic Fund Transfer at the Point Of Sale) payment. Mobile banking refers to the use of a smart phone or other cellular device to perform online banking

tasks while away from your home computer, such as

monitoring balances, transferring funds between s, bill payment and locating an ATM.

Mobile banking in lay man means the using of a mobile phone to offer banking services. Banks have introduced two different products in mobile banking. One is a personal/retail banking product and the other is a product to promote financial inclusion. As a personal banking product it is offered to every savings/current holder and provides anytime anywhere banking. The mobile banking initiatives were started by foreign and private banks followed by public sector banks. The popularity and effectiveness of mobile banking mainly depends on the banking system in the country and their connection with regulatory and ing system. There are lots of factors which mobile banking in India. First of all being so much beneficial, banks are taking initiative and encouraging people to and use mobile banking services. Customers are also adopting the same because they are also getting lots of benefits. Regulatory system of the country is also serious about the success of this concept. Mobile banking refer to provision and availment of banking and financial services with the help of mobile telecommunication devices. The scope of offered ister s and to access customised information. According to this model mobile banking can be said to consist of three inter-related concepts: 

Mobile ing



Mobile brokerage



Mobile financial information services Most services in the categories designated ing and brokerage are transactionbased. The non-transaction-based services of an informational nature are however essential for conducting transactions - for instance, balance inquiries might be needed before committing a money remittance. The ing and brokerage services are therefore offered invariably in combination with information services. Information services, on the other hand, may be offered as an independent module.

Mobile banking may also be used to help in business situations as well as financial services.

CHAPTER 2

HISTORY OF MOBILE BANKING The first mobile banking and payment initiatives was announced during 1999 (the same year that Fundamo deployed their first prototype). The first major deployment was made by a company called Paybox (largely ed financially by Deutsche Bank). The company was founded by two young German‘s (Mathias Entemann and Eckart Ortwein) and successfully deployed the solution in , Austria, Sweden, Spain and the UK. At about 2003 more than a million people were ed on Paybox and the company were rated by Gartner as the leader in the field. Unfortunately Deutsche Bank withdraw their financial and the company had to reorganise quickly. All but the operations in Austria closed down. Another early starter and also identified as a leader in the field was a Spanish initiative (backed by BBVA and Telephonica), called Mobi Pago. The name was later changed to Mobi Pay and all banks and mobile operators in Spain were invited to . The product was launched in 2003 and many retailers were acquired to accept the special USSD payment confirmation. Because of the complex shareholding and the constant political challenges of the different owners, the product never fulfilled the promise that it had. With no marketing and no compelling reason for adoption, this initiative is floundering at the moment. Many other large players announced initiatives and ran pilots with big fanfare, but

never showed traction and all initiatives were ultimately discontinued. Some of the early examples are the famous vending machines at the Helsinki airport ed by a system from Nokia. Siemens made announcements in conjunction with listed and high-flying German e-commerce company, Brokat. Brokat also won the lucrative Vodafone contract in 2002, but crashed soon afterwards when it run out of funds.

EVOLUTION OF MOBILE BANKING BEFORE 2000s: The earliest mobile banking services were offered over SMS, a service known as SMS banking. With the introduction of smart phones with WAP enabling the use of the mobile web in 1999, the first European banks started to offer mobile banking on this platform to their customers. EARLY 2000s: Banks faced mobile banking challenges in the early part of the decade. Consumers found it difficult to view their financial information on the small cell phone screens that were common at the time. Some banks offered the service, only to soon discontinue it; in 2002, Wells Fargo developed a mobile banking service and only 2,500 customers enrolled in it. Because of the poor response, they soon withdrew the offering. MID-2000s: As the size and capabilities of mobile devices increased, so did the effectiveness of mobile banking. Banks introduced services that accommodated more types of cell phones and mobile devices, including smart phones. Consumers preferred the easier navigation and improved images and graphics offered by updated, technologically advanced mobile services. 2008 AND BEYOND

In 2008, smaller banks began to offer mobile banking. More customers of large banks were also using the service. As of February 2009, over 1.9 million customers were using Bank of America's mobile service in the U.S. Other industry players also entered the market; AT&T offers a mobile banking application that allows customers from different banks, with different types of mobile devices, to more easily conduct transactions. Mobile banking has until recently (2010) most often been performed via SMS or the mobile web. Apple's initial success with iPhone and the rapid growth of phones based on Google's Android (operating system) have led to increasing use of special client programs, called apps, ed to the mobile device. With that said, advancements in web technologies such as HTML5, CSS3 and JavaScript have seen more banks launching mobile web based services to complement native applications. A recent study (May 2012) by Mapa Research suggests that over a third of banks have mobile device detection upon visiting the banks' main website. A number of things can happen on mobile detection such as redirecting to an app store, redirection to a mobile banking specific website or providing a menu of mobile banking options for the to choose from.

CHAPTER 3

FEATURES OF MOBILE BANKING

NOTIFICATION

DEVICES

SIMPLICITY

INFORMATION

FEATURES SECURITY

SAVES MONEY ENVIRONMENT

LARGER CLIENT BASE

CONVENIENCE CROSS SELLING

1. Saves Money

FRIENDLY

The average teller is paid $2.36 per telephone or personal transaction at a physical bank. By comparison, the average mobile banking transaction costs about $0.10. Many banks use the savings generated from online transactions to offer clients better interest rates, or other rewards, for maintaining online s.

2. Environment Friendly: Mobile banking reduces the number of paper transactions that would normally occur if a client walked into or called a bank. Reduced paper use helps preserve natural resources and is better for the environment. 3. Cross-Selling:

Banks often use mobile banking as a platform for cross-selling or up-selling other financial services, such as credit cards, vehicle loans, etc. Because the client is not being pressured to consider such services, he or she is more likely to research them while conducting an online banking transaction. 4. Convenience:

Mobile banking is certainly more convenient when compared to calling a bank or physically visiting it. Financial transactions can be performed at any time, day or night, and during holidays. 5. Larger Client Base: Because mobile banking can be performed from any computer, clients that would otherwise need to find a more local bank are no longer required to do so. This provides the bank with a geographically wider, and thus larger, client base.

6. Security: Mobile banking can be plagued with security concerns. Though it is rare, hackers have been known to gain access to client s. Banks have become increasingly vigilant about securing mobile banking access points and requiring additional s or answers to security questions. 7. Information: Clients who perform mobile banking have a better grasp of their day-to-day balances and financial transactions. They are more likely to have a balanced checkbook and to catch incorrect or even fraudulent transactions. 8. Simplicity: Clients can set up instant bill payment and automate other tasks via mobile banking. This simplifies bill payment and frees the client from spending time on writing checks and mailing envelopes. Automated bill payment is also invaluable when the client is out of the country and cannot physically pick up the mail. 9. notification: Most banks will e-mail notifications to their clients when a bill is due or when an statement is available. This helps the client bill payment and other such items before they are overdue.

10. Devices: Mobile banking was first made available over the Internet via personal computer. It later became available on other (and smaller) devices, such as smartphones and PDAs. This means that clients no longer need to carry around a laptop or stay at their desktop computers in order to check their bank .

CHAPTER 4

TYPES OF MOBILE BANKING TECHNOLOGY :

TEXT

TYPES OF

MESSAGING

TECHNOLOGY

SMART PHONE APPLICATION

WEB BROWSERS

The different types of mobile banking technology can be classified by the means of a financial institution used to communicate with customers and allow them access to its services. Most of the technology applications that banks use integrate with smart phones, such as the iPhone and the Blackberry.

The three widely available types of mobile banking technology receive and send data via text messaging, web browsers and smart phone applications. For those customers who wish to take advantage of mobile banking technology but do not have a smart phone, text messaging may be their primary option. Banks send customer alerts via text messages. These alerts are available for balances, sent payments, direct deposits, and a myriad of activity. Some banks allow s to sign up for these alerts through their online banking service for free while others charge a fee, in addition to the text messaging fees customers are charged by their cell phone carriers. Some text messaging may be used to communicate with bank personnel in lieu of e-mail or sending a message through an online web site's center. By texting certain codes or instructions, bank customers may be able to send donations from their deposit s. These donations are sent to charitable organizations or causes with which the bank has an established partnership. A second type of mobile banking technology is the mobile web browser. Individuals who own cell phones with web access are able to go to a modified version of the bank's online site. Full access is given from the site, allowing s can monitor activity, request transfers and make payments. Accessing the bank's website from a mobile phone does not usually result in a charge from the bank, but the will most likely incur data charges from his wireless carrier. One of the most exciting forms of mobile banking technology is the development of smart phone banking applications. These give s one-touch access to many features. Similar to the web browser technology, customers have full access to their s through a mobile phone application. Some banks or payment services allow s to take a picture of a check and make a virtual ATM deposit through their phones. More typical services include transfers, bill payments and activity monitoring. These services allow customers to conduct banking transactions even if they are not near a computer. They can monitor for fraudulent activity and instantly notify bank personnel if there is an issue.

CHAPTER 4

WORKING OF MOBILE BANKING

Mobile banking typically operates across all major mobile providers in the U.S. through one of three ways: SMS messaging; mobile web; or applications developed for iPhone, Android or Blackberry devices.Mobile text and alert is the simplest, allowing the to transfer funds or access information via text message. Texting terminology varies from bank to bank, but the overall function is generally the same. For example, texting "Bal" will obtain the balance while "Tra" will allow inter- transfers. s need to first and their phone numbers with their bank, but once that's completed, they can also set up alerts to letthem now about negative balances or deposit confirmations. Mobile web is the second mobile banking option. Similar to online access from a home-based computer, this option allows for checking balances, bill payment and transfers simply by logging into the 's via a mobile web browser. Mobile banking applications for Android, iPhone and Blackberry, connect the directly to the bank server for complete banking functionality without having to navigate a mobile web browser. These applications can be ed either through the bank's website or through the iTunes stope.Some banks are taking the technology one step further with rewards confirmation, person-to-person payments (P2P) and, more

importantly, remote deposit capture (RDC) capability. Simply put, RDC is a service allowing s to scan checks and transmit the scanned images to a bank for posting and clearing. In the case of mobile banking, a customer takes pictures of both sides of a check and forwards the photos to the bank, which then deposits the funds in the same way as if the deposit was made through a teller. RDC capability means customers have faster access to their money, while automating yet another deposit feature.

CHAPTER 6

SERVICES OF MOBILE BANKING :

Mobile banking service is primarily available over SMS (Short Messaging Service) or through GPRS (General Packet Radio Service) or sometimes through USSD (Unstructured Supplementary Service Data). The services available are:

SERVICES



PAYMENT,DEPOSITS,

INFORMATION

INVESTMENTS



CONTENTS

WITHDRAWALS.

1. INFORMATION: This service provides information about the related service. The customers can make enquiry about the s. Following are the services provided in detail: 

Mini-statements and checking of history



Alerts on activity or ing of set thresholds



Monitoring of term deposits



Access to loan statements



Access to card statements



Mutual funds / equity statements

2. PAYMENTS, DEPOSITS, WITHDRAWALS AND TRANSFERS: The bank provides the services of payments and deposits through mobile banking. They also provides withdrawal and transfer . Fund transfer related to intra bank and interbank are provided. The payments can be utility bill payment, payment on life insurance premeium, payment of electricity bill, etc. Following are the services provided in detail : 

Cash-in, cash-out transactions on an ATM



Domestic and international fund transfers



Micro-payment handling



Mobile & Direct to Home package recharging



Purchasing tickets for travel and entertainment



Commercial payment processing



Bill payment processing



Peer to Peer payments (e.g., Popmoney, Isis)



Withdrawal at banking agent



Deposit at banking agent

3. INVESTMENTS: The bank provides the services related to investments like the customers can open the demat or can invests in mutual funds through the service provided by tie up between various mutual funds. The following are the services provided in detail : 

Portfolio management services



Real-time stock quotes



Personalized alerts and notifications on security prices

4. : This service provide the customers to get the status related to the requests services like request on cheque books, credit cards, debit cards and the status related to any complaints. Following are the services provided in detail : 

Status of requests for credit, including mortgage approval, and insurance coverage



Check (cheque) book and card requests



Exchange of data messages and email, including complaint submission and tracking



ATM Location

5. CONTENT SERVICES:

This service also provides some additional services like the customers can get information on weather updates , news, etc. Following are the services provided in detail : 

General information such as weather updates, news



Loyalty-related offers



Location-based services

CHAPTER 8

ADVANTAGES AND DISADVANTAGES OF MOBILE BANKING

ADVANTAGES OF MOBILE BANKING :

FOR CUSTOMERS

FOR BANKS

1. Easy Transfer Of Money

1. Cost Saving

2. Transactions Done Without Bank

2. Payiing Attention To Customers

3. No Internet Service

3. Maintains Customer Relationship

4 .Easy And Convenient

4. Sales Promotion

5. More Secure

5. Large People

6. Less Time Consuming 7. Low Cost 8. Reduces Fraud 9. Friendly

ADVANTAGES FOR CUSTOMERS :

1. EASY TRANSFER OF MONEY: The customers staying away from their homes and finding it difficult and expensive to remit money to their families, can send money instantly through mobile banking.

2. TRANSACTIONS DONE WITHOUT BANK: Personally going to bank for transferring money or for any other transaction takes more time and energy. On the other hand, with the use of mobile banking you can get your work done within few minutes.The customers can do bank transactions without visiting the bank. All non cash banking requirements can be carried out using mobile phones.

3. NO INTERNET SERVICE: It utilizes the mobile connectivity of telecom operators and therefore does not require an internet connection. Mobile Banking uses the network of service provider and it doesn't need internet connection. In a developing countries like India where there is no internet connection in the interiors there is the presence of mobile connectivity. 4. EASY AND CONVENIENT: Mobile banking is available round the clock 24/7/365, it is easy and convenient and an ideal choice for accessing financial services for most mobile phone owners in the rural areas. You can check your balance, review recent transaction, transfer funds, pay bills, locate ATMs, deposit cheques, manage investments, etc 5. MORE SECURE: Mobile banking is said to be even more secure than online/internet banking. With mobile banking, s of mobile phones can perform several financial functions conveniently and securely from their mobile. 6. LESS TIME CONSUMING: Mobile banking is a terrific way to efficiently manage the occasional istrative task on the go. For small and mid-size business owners, mobile banking gives the precious gift of time. Closing a sale, meeting new customers or smoothing back office shipping glitches are important revenue producers. Waiting in line at the bank to deposit a wad of checks is not worth. 7. LOW COST:

Mobile Banking is cost effective and Banks offer this service at very low cost to the customers. Cell phone banking is cost effective. Various banks provide this facility at a lower cost as compared to banking by self. 8. REDUCES FRAUD: Banking through mobile reduces the risk of fraud. You will get an SMS whenever there is an activity in your . This includes deposits, cash withdrawals, funds transfer etc. You will get a notice as soon as any amount is deducted or deposited in your .

9. FRIENDLY: Mobile banking thorough cell phone is friendly. The interface is also very simple. You just need to follow the instructions to make the transaction. It also saves the record of any transactions made.

ADVANTAGES FOR BANKS :

1. COST SAVING: Mobile banking costs make for a compelling business case - according to Citibank the bank branch is 10 times more expensive than doing a transaction on a mobile phone. It cuts down on the cost of tele - banking and is more economical to banks. The offers can be customized and this personalization can give the banking industry a huge mileage, even at a lower cost. 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 tele-callers. 2. PAYING ATTENTION TO CUSTOMERS: Mobile banking is a brilliant opportunity to simultaneously woo new customers while paring operational costs. By responding to the innovations in mobile technology, banks are effectively saying they are paying attention to the needs of their customers, while at the same time streamlining a number of processes to meet the fast-paced demands of the 21st century.

3. MAINTAIN CUSTOMER RELATIONSHIP MANAGEMENT: Banks can be in touch with their clients with mobile banking. Banks can also promote and sell their products and services like credit cards, loans, etc. to a specific group of customers. It helps to upgrade the quality of services and nature of customer relationship management banks to upgrade the quality of services and nature of customer relationship management.

4. SALES PROMOTION: Mobile phone provides a way to reach out to people in isolated areas. When banks have database of their customers they can use SMS advertising to give information about their services to their existing customers. This also solves the purpose of promotion and may also help in communicating new services. Banks can also up-sell and cross-sell their highly complex financial products the specific set of customers which can be coupled with the selling strategies of Credit Cards, Home Loans and Personal Loans etc.

5. LARGE PEOPLE : Banks can send the message in fewer efforts to huge number of people.

DISADVANTAGES OF MOBILE BANKING

FOR CUSTOMERS

FOR BANKS

1. Lack Of Security

1. Less Profit

2. Lack Of Availability On All Mobile Phones

2. High Cost

3. Charges From Banks

4. Limit On Transaction

DISADVANTAGES FOR CUSTOMERS:

1. LACK OF SECURITY: Mobile banking s are at risk of receiving fake SMS messages and scams. Mobile Banking has to security issues.One of the great threat to Mobile Banking is "Smishing" which is similar to "phishing"..In "Smishing" s receives fake message asking for their Bank details.Many s have fallen to this trap.The loss of a person‘s mobile device often means that criminals can gain access to your mobile banking PIN and other sensitive information. 2. LACK OF AVAILABILITY ON ALL MOBILE PHONES: Modern mobile devices like Smartphone and tablets are better suited for mobile banking than old models of mobile phones and devices. Mobile Banking is not available on all mobile phone. Some time it requires you to install apps on your phone to use the Mobile Banking feature which is available on high end smartphone.If you don't have a smartphone than the use of Mobile Banking becomes limited. Transanction like transfer of funds are only available on high end phones. 3. CHARGES FROM BANKS: Regular s of mobile banking over time can accumulate significant charges from their banks. Regular use of Mobile Banking may lead to extra charges levied by the bank for providing the services.

4. LIMIT ON TRANSACTION: A can have up to nine mobile phone numbers (allowed by TRAI) but only one mobile bank (says RBI). And the limit of transactions for mobile payments is Rs 50,000 per month.

DISADVANTAGES FOR BANKS

1. Less profit: The mobile payments model via telcos makes money on scale. According to Airtel it will take two years to be relevant and five years to make money. Mobile payments today are at the same stage as credit cards 20 years back and ATMs 15 years back. 2. HIGH COST: Despite being convenient, the cost of Know Your Customer (KYC) for mobile banking or mobile payments is huge - Rs 400 to Rs 500 per person. This is more than the average revenue per subscriber (ARPU) for telcos.

CHAPTER 8

DISADVANTAGE OF DEVELOPMENT IN MOBILE BANKING: HANSET OPERABILITY APPLICATION SECURITY

DISTRIBUTION DISADVANTAGES OF DEVELOPMENT

SCALABILITY AND RELIABILITY

PERSONALIZATION

1. HANDSET OPERABILITY : There are a large number of different mobile phone devices and it is a big challenge for banks to offer mobile banking solution on any type of device. Some of these devices Java ME and others SIM Application Toolkit, a WAP browser, or only SMS. Initial interoperability issues however have been localized, with countries like India using portals like R-World to enable the limitations of low end java based phones, while focus on areas such as South Africa have defaulted to the USSD as a basis of communication achievable with any phone. The desire for interoperability is largely dependent on the banks themselves, where installed applications (Java based or native) provide better security, are easier to use and allow development of more complex capabilities similar to those of internet banking while SMS can provide the basics but becomes difficult to operate with more complex transactions. There is a myth that there is a challenge of interoperability between mobile banking applications due to perceived lack of common technology standards for mobile banking. In practice it is too early in the service lifecycle for interoperability to be addressed within an individual country, as very few countries have more than one mobile banking service provider. In practice, banking interfaces are well defined and money movements between banks follow the IS0-8583 standard. As mobile banking matures, money movements between service providers will naturally adopt the same standards as in the banking world. On January 2009, Mobile Marketing Association (MMA) Banking SubCommittee, chaired by Cell Trust and VeriSign Inc., published the Mobile Banking Overview for financial institutions in which it discussed the advantages and disadvantages of Mobile Channel Platforms such as Short Message Services (SMS), Mobile Web, Mobile Client Applications, SMS with Mobile Web and Secure SMS.

2. SECURITY: Security of financial transactions, being executed from some remote location and transmission of financial information over the air, are the most complicated challenges that need to be addressed tly by mobile application developers, wireless network service providers and the banks' IT departments. The following aspects need to be addressed to offer a secure infrastructure for financial transaction over wireless network 1. Physical part of the hand-held device. If the bank is offering smart-card based security, the physical security of the device is more important. 2. Security of any thick-client application running on the device. In case the device is stolen, the hacker should require at least an ID/ to access the application. 3. Authentication of the device with service provider before initiating a transaction. This would ensure that unauthorized devices are not connected to perform financial transactions. 4. ID / authentication of bank‘s customer. 5. Encryption of the data being transmitted over the air. 6. Encryption of the data that will be stored in device for later / off-line analysis by the customer. One-time (OTPs) are the latest tool used by financial and banking service providers in the fight against cyber fraud. Instead of relying on traditional memorized s, OTPs are requested by consumers each time they want to perform transactions using the online or mobile banking interface. When the request is received the is sent to the consumer‘s phone via SMS. The is expired once it has been used or once its scheduled life-cycle has expired. Because of the concerns made explicit above, it is extremely important that SMS gateway providers can provide a decent quality of service for banks and financial institutions in regards to SMS services. Therefore, the provision of service level agreements (SLAs) is a requirement for this industry; it is necessary to give the bank customer delivery guarantees of all messages, as well as measurements on the speed of delivery, throughput, etc. SLAs give the service parameters in which a messaging solution is guaranteed to perform.

3. SCALABILITY AND RELIABILITY : Another challenge for the CIOs and CTOs of the banks is to scale-up the mobile banking infrastructure to handle exponential growth of the customer base. With mobile banking, the customer may be sitting in any part of the world (true anytime, anywhere banking) and hence banks need to ensure that the systems are up and running in a true 24 x 7 fashion. As customers will find mobile banking more and more useful, their expectations from the solution will increase. Banks unable to meet the performance and reliability expectations may lose customer confidence. There are systems such as Mobile Transaction Platform which allow quick and secure mobile enabling of various banking services. Recently in India there has been a phenomenal growth in the use of Mobile Banking applications, with leading banks adopting Mobile Transaction Platform and the Central Bank publishing guidelines for mobile banking operations. 4. APPLICATION DISTRIBUTION : Due to the nature of the connectivity between bank and its customers, it would be impractical to expect customers to regularly visit banks or connect to a web site for regular upgrade of their mobile banking application. It will be expected that the mobile application itself check the upgrades and updates and necessary patches (so called "Over The Air" updates). However, there could be many issues to implement this approach such as upgrade / synchronization of other dependent customers. 5. PERSONALIZATION : It would be expected from the mobile application to personalization such as : 1. Preferred Language 2. Date / Time format 3. Amount format 4. Default transactions 5. Standard Beneficiary list 6. Alert

CHAPTER 9

PRECAUTIONS TO BE TAKEN BEFORE USING MOBILE BANKING Growing use of the Internet via the mobile in the country `as well as extending the scope of mobile banking. Bank and without any instrument – Pdht the home through mobile banking facility made it increasingly popular, some risks are also associated with the Vantage, which can be a bit cautious and can be avoided by taking some precautions in mobile banking.

1. AUTO LOCK ACTIVATED : See the first of its mobile banking activated auto lock your phone is working or not.Choose a lock to open, which is not possible if Crack. For 8 or more characters in the characters (characters), Numerikals (pts) Use of special characters that can generate strong s. 2. KEEP CONFIDENTIAL INFORMATION CONFIDENTIAL : Text message with no major or confidential information such as banking numbers, s, Pan card and birth date, etc. Do not disclosed. Hackers use this information to hack into the bank can. Mobile banking is also necessary to prevent fraud and protect the security software to your mobile.

MOBILE-BANKING-COMPONENTS

3. CAREFULLY : A new mobile application, games, movies, music or video ing, etc. Keep in mind that where you are ing from the site is trustworthy. Often times these files through your phone becomes a victim of hacking or viruses can be sent. Also delete the message from the mobile chains.

4. AVOID PLACING ON BLUETOOTH : Protect your smartphone from viruses is essential to keep it if you do not use the Bluetooth switch off. Bluetooth is on hackers from accessing your mobile can get the chance. To protect mobile hacking and virus software constantly updated to keep Fayrbal and safety. Mobile phone or some software companies that make them from time to time provide updated live version, the installation should continue. 5. IT ALSO REQUIRES A HABIT : Daily to protect your mobile transaction Delete Browsing History is good to keep up the habit. It used to be safe enough for you.

CHAPTER 10

SERVICES PROVIDED BY STATE BANK OF INDIA :

1.

MOBILE

BANKING

SERVICE

OVER

APPLICATION/

WIRELESS

APPLICATION PROTOCOL (WAP) The service is available on java enabled /Android mobile phones (with or without GPRS) /iphones where the is required to the application on to the mobile handset. The service can also be availed via WAP on all phones (java/non java) with GPRS connection. The following functionalities are available: 

Funds transfer (within and outside the bank)



Immediate Payment Services (IMPS): Click here for details.



Enquiry services (Balance enquiry/ Mini statement)



Cheque book request



Demat Enquiry Service



Bill Payment (Utility bills, credit cards, Insurance ), Donations, Subscriptions



Mobile /DTH Top up



M Commerce (Merchant payments, SBI life insurance )

Business Rules •

All

Current/

Savings

Current holders

Bank



holders in

in SME segment are eligible.

P

segment

and

•

Transaction limit per customer per day is Rs.50,000/- with a calendar month limit of Rs.2,50,000/-

•

All customers can avail the Service irrespective of their telecom service provider.

•

The Service is free of charge. SMS/GPRS cost will be borne by the customer.

2. MOBILE BANKING SERVICE OVER SMS: The service is available on all phones (java/non java) with/without GPRS connection. No need to the application. Ordinary SMS charges are applicable. The following functionalities are available: •

Enquiry Services (Balance Enquiry/Mini Statement)

•

Mobile Top up

•

DTH Top up/ recharge

•

IMPS- Mobile to Mobile Transfer

•

Change MPIN

Business Rules •

All

Current/

holders •

Savings

Bank

holders in

P

segment

and Current

in SME segment are eligible.

Transaction limit per customer per day is Rs.1,000/- with a calendar month limit of Rs.5,000/- . However, customers desiring to transact up to Rs.5000/- per day or Rs25,000/- per month may do so after obtaining an One Time (OTP)

•

All customers can avail the Service irrespective of telecom service provider.

•

The Service is free of charge. SMS cost will be borne by the customer.

•

As a matter of abundant precaution, Customers are requested to delete all the messages sent to the number 9223440000, once the response for their request has been received.

3.

MOBILE

BANKING

SERVICE

SUPPLEMENTARY SERVICE DATA) :

OVER

USSD

(UNSTRUCTURED

The service is available on all phones (java/non java) with/without GPRS connection. No need to the application. The following functionalities are available: •

Enquiry Services (Balance Enquiry/Mini Statement)

•

Mobile Top up

•

Funds Transfer (within Bank)

Business Rules •

All Current/ Savings Bank holders in P segment and Current holders in SME segment are eligible.

•

Transaction limit per customer per day is Rs.1,000/- with a calendar month limit of Rs.5,000/-

•

The Service is available for subscribers of select telecom operators only.

•

The Service is free of charge. USSD session charges will be borne by the customer.

•

The service is session based and requires a response from the within a reasonable time.

SERVICES PROVIDED BY PUBLIC BANK (BANK OF BARODA): 1. BALANCE ENQUIRY: 2. MINI STATEMENT 3. FUND TRANSFER WITHIN BANK (i) Mobile to bank (ii) Mobile to 4. FUNDS TRANSFER WITH OTHER BANKS (i)NEFT (National Electronic Fund Transfer complete registration (ii)IMPS (Immediate Payment Services

5. OTHER SERVICES a) BILL PAYMENT (i) biller (ii) Make payment (iii)Ad-hoc bill payment b) AIRLINE TICKETING (i) Booking & payment (ii) Payment only (iii) Reprint option c) MOVIE TICKETING d) SHOPPING (NEXT PHASE) e) MOBILE RECHARGE

CHAPTER 11

GUIDELINES BY RBI :

1. The Reserve Bank of India (RBI) issued the guidelines for Mobile Banking transaction in October, 2008 which permit banks to provide mobile banking transactions. 2. The guidelines also permit banks to extend this facility through their business correspondents. Complaints/ grievances arising out of phone banking facility are also covered under the Banking Ombudsman Scheme of RBI. 3. The mobile banking guidelines were further relaxed in May, 2011 to permit mobile banking transaction without ended to end encryption upto Rs.5000/-and in December 2011 to remove the transaction limit of Rs.50,000/-per customer per day. 4. The RBI has named separately policy for curbing the cases of misuse of credited cards this includes the requirement of additional factor authentication for online transactions/interactive voice (IVR)transaction online alerts to the customers for all types of card transaction at all channels irrespective of the amount ,mandatory pin validation after every successive transaction at ATMs. 5. Mobile Banking can now be offered to customers without any debit or credit cards too.

6. In order to for Mobile Banking, the customer should be physically present. But there could be relaxation applied later.

7. Banks will have to offer the mobile banking service with all mobile operators, before 6 months of the start of Mobile Banking. 8. Mobile banking customers are allowed to transfer funds of a maximum of Rupees 5000 daily, and purchase goods or services worth Rupees 2500 (total Rupees 7500 per day). 9. Banks may put in place end-to-end encryption of the mobile PIN number (mPIN) for better security. 10. Internet IDs and s can be used for mobile banking also.

CHAPTER 12

STATUS OF MOBILE BANKING : 1. Consumers across India are now using bank branches less frequently and are instead embracing the Internet and mobile phones for banking,. 2. The Asia-wide survey, based on the of 5,000 repondents, says that branch banking in India witnessed a 15% decline as the average weekly visit of a customer to the branch was 0.58 times in 2007, which has come down to 0.49% in 2011. It is customer relations that drive loyalty, not the price of products. 3. Branch usage has dropped by 27% on average across Asia between 2007 and 2011. 4. Mobile and Internet Banking has witnessed robust growth as usage of mobile banking grew by 338% that of Internet banking increased by 130% from 2007 to 2011. 5. In the last three years, loyalty of Indian customers has dropped by 39 percentage points. 6. In 2007, 79% of respondents said that they would recommend their financial instituion to a friend, while in 2011 only 40% respondents said so. 7. According to HDFC Bank, two years back 40-45% of the banking transactions were happening in the bank branch. This has dropped to 18% now. So, 82% of the banking needs of a HDFC bank customer who has ed for mobile banking are done outside the bank branch. HDFC has 1.2 million mobile banking s.

8. State Bank of India has 5.2 million ed mobile banking s and this is increasing by 2 lakh new mobile banking s per month. Almost 63% of Citibank holders use the digital medium for banking.

9. Banks have gradually moved from offering non-financial services to financial services on mobile phones - the evolution curve has been: alerts (on ATM withdrawls, credit card purchases etc), cheque book request, payments (of utility bills), debit and credit statements, fund transfer, opening fixed deposits, cash management at low end (up to Rs 50,000 per day) etc. In future more services will be added.

10. The Reserve Bank of India has allowed use of 'semi closed wallet' by mobile companies. Via semi closed wallet s, people can send and spend money through the mobile network, but can't withdraw cash. Airtel, Vodafone and Idea are offering such services.

11. To expand mobile banking reach, HDFC Bank has started Hindi mobile banking service and a 'net safe light' virtual card - both were started last month. The latter helps a to store a limited value on his mobile. Say a credit card limit is Rs 2 lakh but a want to buy books online worth Rs 2,000. He can create a new limit on his card using net safe light and use the code generated for online shopping. This creates a security layer for the - he uses the card for online payments without worrying about it being misused as the limit is only Rs 2,000. 12. According to a recent survey, nearly 17.75 million customers are on mobile screen. The leading banks in this sector are ICICI bank; HDFC and SBI. Some of the other key players in mobile banking are Axis Bank, Syndicate Bank, Canara Bank and Bank of Baroda

LATEST TRENDS IN MOBILE BANKING : Since it is not feasible to open bank branches to cater to every individual and in order to reach the maximum number of people, Banks have adopted mobile based channels as delivery channels, because of their reach and low cost service delivery platform. The mobile phone market is growing at 20% p.a. with mobile connectivity in almost every part of India.

Mobile phone penetration is set to reach 60% of India‘s population in 2011. It is felt that mobile banking is going to be the next revolution in the telecom and banking sectors. To enable wide coverage of mobile banking services, major telecoms and banks are entering into deals and MOUs. The telecom companies will act as Business correspondents and provide a range of financial products and services offered by the bank through the mobile operator‘s retail outlets. A mobile will have to be opened by every for doing mobile banking transactions. The present focus of the banks and telecom companies will be on the unorganized sector like migrant labourers who need money remittance services. A remitter in one city of India can send money back to his home in another city or village either by transfer or instant money transfer module. The transfer method is where money is transferred from the of the remitter to that of the beneficiary when they both have s with the same bank. The second method is by the instant money transfer module, whereby, the remitter with an with a particular bank remits money to the beneficiary who has a ed mobile connection but does not have a bank . With the advent of technology and increasing use of smartphone and tablet based devices, the use of Mobile Banking functionality would enable customer connect across entire customer life cycle much comprehensively than before. With this scenario, current mobile banking objectives of say building relationships, reducing cost, achieving new revenue stream will transform to enable new objectives targeting higher level goals such as building brand of the banking organization. Emerging technology and functionalities would enable to create new ways of lead generation, prospecting as well as developing deep customer relationship and mobile banking world would achieve superior customer experience with bi-directional communications. Among digital channels, mobile banking is a clear IT investment priority in 2013 as retail banks attempt to capitalise on the features unique to mobile, such as location-based services.

CHAPTER 13

MOBILE BANKING ON THE RISE IN INDIA : With mobile phone penetration of over 80 per cent, India has a huge potential for mobile banking. But on the global landscape, mobile payments have a long way to go in India. According to the MasterCard Mobile Payments Readiness Index (MPRI), India ranked 21st among 34 countries with the score of 31.4 on a scale of 100. The index is a data-driven survey of the global mobile payments landscape. It relies on an analysis of 34 countries and their readiness to use three types of mobile payments: person to person, mobile e-commerce and mobile payments at the point of sale (POS). The index also points out that consumers in India have not yet fully embraced mobile payments. Only 14 per cent of Indian consumers are familiar with both P2P and mcommerce transactions, and 10 per cent are familiar with POS transactions. Singapore topped the charts with a score of 45.6 followed by Canada and the US with scores of 42 and 41.5, respectively. It seems to be gaining popularity among Indians with increasing number of people using this platform to buy tickets, pay bills, shop online, and transfer funds. The opportunity to expand reach, grow revenues and gain operating efficiencies have persuaded several banks to encourage their customers in using mobile banking. The number of mobile banking transactions doubled to 5.6 million in January 2013 from 2.8 million a year ago. The value of these transactions increased threefold to Rs 625 crore during the month from Rs 191 crore in January 2012. ICICI Bank, which has the largest share in mobile banking payments, makes periodic offers to its customers to encourage them in using its mobile banking services. The bank has partnered several service providers to offer its customers discounts on their products and services. It has also tied up with different billers to allow its customers in making utility bill payments. There is an 100 per cent growth in the number of people using mobile banking in the past one year. Transactions are up by 300 per cent during the period. The private lender is also using its network of 10,000 ATMs and close to 3,000 branches to reach out to customers and make them familiar with the bank‘s advanced mobile application iMobile.

Mobile banking has provided foreign banks with an option to grow customer base and expand their reach in India. Citibank is one of the first banks in the country to offer map-based location services. Its mobile applications are platform neutral and work across Android, Symbian and IOS platforms. Today, more than 16 per cent of the online customers actively use mobile banking platform. There are a million banking s across Asia-Pacific and the number is much higher globally. In India, there is an increase of over 200 per cent in transactions on mobile banking platform in the last one year. Banks are also asking their employees to transact more through mobile banking channels. No technological product can be sold unless and until the front office personnel are convinced of its utility. Hence, as a first step, is to inculcate the habit of using mobile banking by the own staff. The bank has also partnered a number of merchants in and around its offices to accept payments through mobile banking. The popularity of mobile banking has also convinced state-run lenders and co-operative banks to introduce their mobile applications. The State Bank of India currently has the largest share in mobile banking transaction volume.

GROWTH OF MOBILE BANKING IN INDIA

1. Mobile banking is becoming more and more prevalent in India due to its convenience. Month-on-month transactions carried out through mobile banking are surging both in volume and value .

MOBILE TRANSACTIONS MONTH

VOLUME(ACTUAL)

VALUE(IN RS’000)

February

2,799,554

1,960,417

March

3,123,105

2,325,321

April

3,178,405

2,345,678

May

3,346,743

2,865,454

June

3,437,074,

3,067,107

July

3,705,690

3,379,715

August

3,968,226

3,548,628

September

3,897,614

4,104,519

October

4,437,342

7,790,473

November

4,720,871

5,389,548

2. According to Reserve bank of India (RBI) data, a total of 3.7 crore mobile transactions took place between February and November 2012, jumping around 1.7 times in volumes over this 10-month period. These transactions saw nearly a three-fold increase in value over the same

period.

3. Increasing smartphone adoption and initiatives such as media promotions and customer education programmes for mobile banking have led to this uptrend. For customers, mobile banking

is

convenient

while

banks

benefit

through

a

low-cost

channel.

4. The SBI group dominates this space in volume with an overall share of 67.4 per cent in total volumes. Private and foreign banks follow, with an overall share of 30.1 per cent in November.

However, the SBI group has a lower share in value compared to the private and foreign banks. 5. Among banks, SBI leads the race with 65.4 per cent share in the total number of mobile transactions carried out in November, followed by ICICI Bank with a 14.2 per cent share, Axis with 9.4 per cent and Citi bank with 3.5 per cent.

6. Around three per cent of SBI's total customer base is into mobile banking transactions. For ICICI Bank, over 10 million customers have currently ed for mobile banking. Prepaid mobile recharges, DTH recharges, ticket bookings (movies/travel) are among the fast growingtransactions in mobile banking. Currently there is no cap on per-day transactions for encrypted transactions in banking channels, including mobile banking. These limits are set by individual banks depending on their risk perception of the respective channels. However, for unencrypted transactions, such as those through SMS, the RBI has set a limit of Rs 5,000 per day.

Mobile banking in India on rise, SBI and ICICI lead volume & value Mobile based banking seems to be on rise in India and it can be gauged from data provided by the central bank on mobile banking. According to RBI‘s data, volume of mobile based transactions has gone up over 40 % in August this year when compared to the month of February. In February 2012 mobile based banking transactions stood at 2. 8 million, while in August the figure increased by more than a million with nearly 4 million recorded transactions. While the volume of m-banking transactions has been increasing since February, the size of value also ballooned with significant 81% when compared February‘s total transaction value. In February total amount processed via m-banking stood at Rs.196 crore, whereas in August amount value rose by Rs. 158 crore and pegged at Rs. 354 crore. See the graph below to understand the month on month (MoM) rise in m-banking transaction.

While India‘s largest public sector bank, State Bank of India (SBI) has been leading the volume of m-banking transaction, ICICI bank is ahead in value wise. Volume wise Axis, Citi Bank and HDFC have stood at 3rd, 4th and 5th position respectively. In August this year SBI had processed around 2.7 million transactions worth 121 crore, a 17% rise in volume and 26% by value in comparison of February 201. On the other hand, ICICI processed only one fourth of SBI‘s transaction s (around 3.58 lakhs), however value wise ICICI had sured SBI‘s total transaction value. Importantly, if we compare the ICICI‘s m-banking transactions on metrics, volume and value of February 2012 with August, the bank had ed 60% and 98% growth in volume and value respectively.

REASON FOR RISE ON MOBILE BANKING

In fact there are various reasons besides the usual convenience and ease of concluding banking transaction at fingertips. Firstly increase in number of banks ing Inter Mobile Payment System (IMPS). Till February 2012, only 35 banks offered the service. However, now about 50 banks offer the service. In August, around Rs. 43.64 core had transacted through IMPS, approx 12% of overall mobile based banking transactions. Secondly fruitful partnership between telcos and banks. For instance in May this year, Bharti Airtel and Axis Bank teamed up to open no-frills savings on Airtel Money platform called airtel money Super powered by Axis Bank. Post this partnership, in June; Axis bank had experienced 43% and 93% rise in volume and value of m-banking transactions respectively. Despite of this rise in m-banking transaction, banks are yet to fully exploit this technology even for their existing customers, the current growth rate is low compared to the number of bank s and the vast mobile subscriber base of more than 900 million. Largely, growth of m-banking in India was choked by tough regulatory guidelines. As per RBI guideline, only banks which have been permitted to provide mobile banking transactions by the RBI can launch mobile mobile wallets & mobile s. If an operator wants to offer mobile wallet service, it needs to get into a partnership with a bank (like Airtel & Axis bank). As of now, prepaid balance on a mobile phone can only be used to buy mobile value added services and is useful for little else. According to a research report named Digital India – The rush to mobile money: madness or masterstroke by Boston Consulting Group (BCG) , payments and banking transactions through mobile phones in India are expected to touch $350 billion (Rs 15,75,000 crore) by 2015. BCG also expects that government payments through mobile-based transactions to touch $40 bn (Rs 1,780 crore) by 2015. Recently National Payment Corporation of India (NPCI) had extended IMPS for merchant payment so that consumers can pay at retail shops by using their mobile phones. Currently, India has around 300 million mobile active phone subscribers, compared with 240 million individuals with bank s. More than half of Indian households approximately 110 million household don‘t have a bank . However, 42% of households have at least one mobile phone with nearly 90% of those phones are capable of handling basic financial transactions. Further, With expected regulatory ease-off from RBI

and well oriented partnership between telcos and banks, in our view potential of m-banking has just started taking off and will witness robust growth in future. Some Indian companies that are into mobile payments 1. Paymate- Mobile Commerce Company 2. ngPay- Mobile banking and payment service provider 3. Oxicash- Prepaid service provider 4. MoneyonMobile- Mobile Payment Platform 5. Movida- Mobile Payment Services

CHAPTER 14 THE ROLE OF MOBILE BANKING IN SMALL-SCALE AGRICULTURE

Mobile banking, or m-banking, is the provision of banking or financial services with the help of mobile phones. These services can include: performing balance checks, transactions, payments or credit applications. ―Anywhere banking‖ is mostly accessed via SMS messages, although newer smartphones enable the usage of mobile broadband. Although there are different types of mobile banking, the following diagram illustrates its core architecture:

At least three different models of mobile banking can be identified: 

Models in which the network operator takes the lead: primarily for m-money, where the balances of the s‘ m-wallets are maintained by the network operator in a combined, trust in a bank. The most successful example of this approach is Kenya‘s M-PESA, introduced by Safaricom. A report by GSMA looks closely into this success story.



Bank-led models, where all m-banking clients must have bank s. Many banks throughout the world use mobile phones just as an additional channel for their servicesAn example is ―Hello Money‖, a mobile banking service offered by Barclay‘s in Kenya and India.



Third-party service providers, who usually work with one or more banks and one or more network operators to launch and operate their services.

There are

seven different services which can become important tools for farmers in

developing countries: 

Make it cheaper and easier for smallholder farmers to save, receive loans and make loan payments.



Make it easier for input suppliers to collect and manage payments from smallholder farmers.



Make it easier and safer for traders to manage transactions and make deposits into their bank s.



Make it easier for large buyers to pay thousands of producers faster (and reduce side selling) and manage any credit they offer such producers.



Make payments for micro-insurance and receive any pay outs from such insurance.



Increase the efficiency and reliability of any voucher services for fertilizer or other inputs provided by a government, an NGO or a donor project.



Enable producers and others in the value chain to more easily and cheaply receive remittances domestically and internationally — critical assets to help with cash flow.

There are more than twice as many people in the world with mobile phones than people with bank s. This means that mobile has the potential to play a major role in bringing financial services to the world‘s unbanked population, constituted largely by people who work in the fields. However, the relation between mobile banking and small-scale agriculture is quite new, and there are still many lessons to be learnt. Mobile banking does not eliminate the need for cash, and although it allows subscribers to save and exchange virtual money, shortage of paper currency is not uncommon in many remote settings. The briefing by USAID offers some a set of questions that must be asked before deciding to use m-money or m-banking services as part of an agriculture development project: 

Ask if m-money really has potential to solve a key constraint related to payments or access to financial services for a project‘s target beneficiaries, or if it offers a significant opportunity to increase success.



Find out whether the relevant financial services institutions (ones willing to offer products to meet the needs of farmers) can actually offer m-money services.



It should not be assumed that the relevant m-money/m-banking service will be sustainable and capable of scaling.



If m-money/m-banking does have great potential to help an agriculture project, how best might donors be involved?

In conclusion, while mobile banking offers many potential benefits to farmers in developing countries, it must be integrated in development projects in a cautious and informed way.

CHARGES FOR THE MOBILE BAKING SERVICES

Several banks have increased or started imposing charges for transaction alerts through SMS as well as for mobile banking. As usual, private lenders have taken the lead, which soon would be followed by nationalized banks. The banks, having given consumers with ‗free‘ services, and have now started charging for them or hiking already existing fees fatten their bottomlines. So

this year, many banks have started charging for SMS alerts on

transactions and hiked the annual fees on debit/credit cards. A few banks have even increased charges to deposit cash in your s. The list includes large banks such as ICICI Bank, HDFC Bank, Axis Bank, Kotak Mahindra Bank and Canara Bank. Here are some areas in which charges have been increased. SMS Alerts: Over the past month, almost all banks have begun to charge for SMS alerts on transactions.

Axis Bank sent an SMS to its holders which states that ―From 15 June 2013 this (SMS banking) service will be charged Rs5 per month‖. ICICI Bank is charging Rs15 per quarter. Interestingly, both amount to an identical Rs60 per annum giving rise to the suspicion that banks, working through the Indian Banks Association, decide to hike rates in tandem or to a pre-decided plan. State Bank of India (SBI) is providing various services like MobiCash, mobile banking and SMS banking free of cost. Other state-run lenders like Punjab National Bank (PNB), Bank of Baroda (BoB) and Canara Bank are also providing SMS banking and mobile banking services free of cost. (Update: As of 1 July 2013, both SBI and PNB decided charging Rs15 per quarter for SMS alert services. PNB, however, said, s of senior citizens, its staff-in service and retired and students, will be exempted from this charge) When asked, an Axis Bank executive said whoever is subscribed to their SMS banking services will be charged Rs5 per month. He said, whoever chooses to unsubscribe from (to unsubscribe customers have to visit branch personally) their SMS Banking services will not be charged anything. Clearly, the banks are testing the ground. Nobody is likely to unsubscribe at a time when SMS alerts have helped protect part of the money. ICICI Bank notifies on its website ―Please note with effect from 1 May 2013 all savings customers availing alerts facility through an SMS will be charged Rs15 per quarter (inclusive of taxes)‖. However, ICICI Bank has kept the facility free for s such as salary , senior citizen savings , silver savings and privilege banking. HDFC Bank notifies on its website, ―Effective 1stApril, customers ed for InstaAlert service with ‗SMS‘ as the alert delivery channel, would be charged.‖ HDFC Bank customers ed for InstaAlert service through ‗SMS‘ are charged Rs15per quarter for salary or savings s, while customers who hold current are charged Rs25 per quarter. However, HDFC Bank said, InstaAlerts delivered through emails would remain free. Interestingly debit or credit card transaction alerts sent as per regulatory guidelines and net-banking transaction alerts are not covered in the HDFC Bank InstaAlertservice. Customers who are not ed for InstaAlert service will continue to get these alerts free of charge, according to HDFC Bank. While all private sector lenders have increased charges for SMS alerts, Kotak Mahindra Bank has decided to reduce its already very high charges. This reduction would

bring the rates at par with other banks. It notifies on its website ―for savings holders: The daily balance SMS alert that costs Rs200 per annum will be reduced to Rs120 per annum while SMS for weekly balance, transactions and value added alerts will cost Rs60 per annum from Rs75 per annum with effect from 1st July.‖ Yes Bank, which offers up to 7% interest on saving s, is charging Rs10 per month to their basic saving (smart salary) holders. While other holders would continue to get transaction alert messages free of cost.

Kotak and Yes Bank, pays a higher interest on savings balances above Rs1 lakh. But it seems both were clearly charging significantly more for other services. Even today, at Rs120 per annum, the charges are double than that of ICICI, HDFC Bank or Axis Bank.

CHAPTER 15

FUTURE OF MOBILE BANKING 1. Mobile banking is the future because of its cost effectiveness and ability to reach out to customers in remote areas. It will take 5-6 years for the model to mature. 2. In US, Europe, phones with NFC (near field communication) have entered the market. NFC is a chip embedded in a phone enabling the phone to interact with a point of sales terminal (with this, phone can act as a virtual credit card). 3. Cheque transaction can be done via mobile phones. In US it is called 'Cheque 21' or 21stcentury cheque payment. Not yet available in India. 4. Banks will be able to approve and give loans via mobile banking within the next five years. This will further reduce the need to go to a branch.

CASE STUDY Mobile Banking: an Indian case study In Bangalore‘s Avalahalli neighborhood, a bank and microloans have transformed the life of 32-year-old Sabira Khanam. Her first loan, of 10,000 rupees (about $200), allowed her to experiment with a small-scale kerosene distributorship. A second, smaller infusion financed her sister‘s wedding. A third, of 20,000 rupees, launched a business sewing sequined saris for sale to local women. Khanam, who lives alone and has disabilities stemming from childhood polio, is now able to rent a large masonry house. And she got the cash to do this without resorting to local loan sharks, who charge 2 to 10 percent monthly interest for long-term loans–and much more for small, short-term loans. But more than half of India‘s 1.1 billion people lack access to the kinds of financial services that made such a difference for Khanam. ―In most of the developing world– and that means most of the world–the people that are ‗unbanked,‘ or very badly banked, represent 70 percent of the population,‖ says Michael Chu, a Harvard Business School lecturer and an expert on microfinance, which extends basic banking services to poor people who have not been served by the traditional financial system. ―Literally, you are talking about 4 billion of the 6.5 billion people in the world. We are just beginning to penetrate that.‖ And despite the well-understood potential of microlending to help lift people out of poverty, it currently reaches fewer than 200 million people worldwide. (A 2007 estimate put the figure as low as 133 million.) Microfinance ―has been progressing at a very fast rate,‖ Chu says. ―But if you look at it in of how many people [enjoy the benefits], we are just beginning.‖ A peek at the istrative tasks associated with Khanam‘s loans helps explain why. A representative from Grameen Koota, the microfinance institution that lent to Khanam, must attend weekly meetings at her house to accept repayments. (Khanam leads a group that includes nine other borrowers, all of them women, who have financed everything from down payments on motorized rickshaws to materials for incense manufacture.) To service its 160,000 borrowers, Grameen Koota maintains a staff of 600, most of them loan officers from 52 branches who must attend 5,000 such meetings each week. Beyond the heavy workload, the risk of robbery, embezzlement, or fraud plagues the process. ―Today, every one of my loan officers is carrying about 50,000 to 100,000 rupees to these meetings,‖ says Suresh Krishna, Grameen Koota‘s managing director. ―He is going 20 kilometers, collecting repayments, and bringing it back. We are carrying so much cash. We are prone to

thefts, frauds, robberies, and misuses of this money. In one incident, one of my fellows was robbed; five people stopped him, showed knives, and snatched away 33,000 rupees.‖ While visiting Khanam‘s house and listening to her story over a glass of orange soda (and over the tinny strains of the prayer calls from the nearby mosque), I noticed that she owned a cell phone. It was a simple Nokia 1100, the low-end stalwart of developingworld communications; she purchased it last year after concluding that the business value justified the investment of 3,000 rupees (roughly the retail cost of six of her saris). Her prepaid plan allows outgoing calls for about half a rupee (less than two cents) per minute. One of her communication strategies is to note the phone number of an incoming call but not answer the phone. It‘s a common trick throughout the developing world; in this manner, people can convey mutually understood messages, such as ―Let‘s meet.‖ Soon, the phone could transform how she deals with Grameen Koota. In one of a handful of such initiatives in India, a Bangalore startup called mChek is plunging into microfinance. Its software is already used by 500,000 people, who can use their mobile phones to pay their phone bills and purchase a limited number of goods and services, such as airline and movie tickets. Through a pilot project, as many as 5,000 borrowers will begin using the system to manage their finances–tapping keys on their cell phones to access bank s and execute transfers, make payments to Grameen Koota, and possibly even do business with local merchants. Several borrowers should be able to share one phone. The new system could help Grameen Koota achieve its goal of roughly quadrupling its lending efforts by 2010. ―All this will get eliminated,‖ Krishna exclaims, pointing to photos of his loan officers poring over stacks of rupees. ―All our transactions will be captured digitally. The back-office functions will become automated. It will become so much more efficient and save a lot of time. So we can add on more borrowers.‖ If this and similar efforts succeed, the concept could be extended to millions–even hundreds of millions–of Indians, giving them access to banking and credit for the first time. And India‘s national economy would stand to gain as well. Money that is electronically lodged in s earns interest for banks and holders. Money sitting in wallets, or under mattresses, does not–and right now, 95 percent of financial transactions in India are conducted in cash. ―You are talking about tens of billions of dollars in organized commerce on an annual basis,‖ says Mohanjit Jolly, the executive director of the Indian office of the venture capital firm Draper Fisher Jurvetson, which has invested in mChek. ―Treasury coffers will have a lot more money, and villagers will start earning interest on this money. Overall, the cost of capital will get reduced, liquidity will get increased, and you will

see phenomenal changes in of what the villagers will be able to do. The bottom line: it‘s education, it‘s connectivity, it‘s improved quality of life … [and] this mobile connectivity,

this

mobile

transaction,

is

one

of

the

key

ingredients.‖

More than 450 million Indians live below the poverty line–that is, on less than 25 rupees per day. Increasingly, though, these people are buying cell phones. By the end of August 2008, 305 million Indians had cell phones; the total grew by more than 9 million in August alone, making India the fastest-growing mobile market in the world and the secondlargest after China. At this rate, observers say, India could have nearly 750 million cell-phone owners by the end of 2012. And most new subscribers are poor rural dwellers taking advantage of plunging costs for no-frills prepaid plans (see ―Phone Banking‖). In g up for cellular service, many of them are leapfrogging elements of the traditional infrastructure to which they have little or no access: landline phones, the Internet, the power grid. All these new cell phones could deliver the benefits of no-frills banking and credit to the rural poor–something India‘s central bank, the Reserve Bank of India (RBI), has been pushing banks to do, since it could improve people‘s lives in myriad small ways. ―A lot of poverty comes from having not even the tiniest amount of financial slack,‖ says Antoinette Schoar, an associate professor of entrepreneurial finance at MIT‘s Sloan School of Management. ―People who have no access to credit at all–like really small farmers–pay sometimes up to 10 percent per day. They literally take 100 rupees‘ worth of goods from a vendor and have to give back 110 rupees in the evening. If they have even a tiny shock one day–a tiny accident–and can‘t pay back the vendor, it is devastating.‖ Credit can smooth out farmers‘ financial boom-and-bust cycles, she says, allowing more consistent access to food, medical care, and other necessities. Until now, mChek‘s payment software has had fairly limited applications; its 500,000 ed s employ it mainly to top up prepaid s with Airtel, India‘s dominant mobile-phone company. (Most s are in India, but some are in Sri Lanka, the only other country where mChek now operates.) But in theory, the technology could be used for any financial transaction; entering a PIN and making a few clicks on the keypad shifts money from one place to another. When I met with mChek CEO Sanjay Swamy in his third-floor office suite, overlooking a thoroughfare crawling with cars, motorcycles, and yellow motorized rickshaws, he was enthusiastic about the prospect that mChek could bring mobile banking to the masses. When Indians sign up for their first cell phones–a process that involves identity verification in a country that has no counterpart to the U.S. Social Security number–they

could open a bank simultaneously. Considering that Indians are g up for 16 million new s monthly (the net increase is smaller because some s expire), ―that‘s a half-million s per day, or about six s per second,‖ Swamy told me. ―By the time I finish this sentence, we lose the opportunity to bank a hundred people! That‘s how stunning the opportunity is. If they are sophisticated enough to learn how to use a cell phone, chances are they are sophisticated enough to use it for other applications.‖ India‘s regulations, unlike those of some other countries, do not allow telecom companies to enroll people in bank s; only banks and nongovernmental organizations, including microfinance institutions like Grameen Koota, can do that. So for now, mChek hopes to form partnerships with such organizations. To get some sense of the potential benefits for the Indian economy, consider just one type of transfer: the payment of phone bills themselves. Today, most Indian cell-phone s pay for service in advance, in cash; the average monthly expenditure is about 250 rupees. If only 10 percent of India‘s 305 million mobile-phone subscribers opened bank s and started paying just these bills electronically, more than 7,600 rupees, or $160 million, would exit the cash economy and enter the banking system every month. And to grasp how ordinary people could benefit, consider the life of the average farmer in the Bangalore area. Typically, a farmer spends hours trekking into the city for a 4:00 a.m. auction to sell his goods. The auction concludes by 6:00 a.m., after which the farmer takes an IOU to a bank, waits for it to open, and collects his money. Then he returns home, risking theft on the way. ―We looked at the model and said, What if the retailer could use mChek to pay farmers electronically, and the farmer would receive notification on his cell phone?‖ Swamy says. The company conducted a pilot project with Citibank and a Bangalore retailer that buys fresh produce; they learned that 85 percent of the farmers attending the auction already owned cell phones. And some reported that if they could accept payment electronically, not only would they save hours queuing at banks, but they might skip the journey altogether, sending a son or a hired laborer in their place. Of course, mChek is not the first company with visions of using cell phones to bring banking to the world‘s poor. Ignacio Mas of the Consultative Group to Assist the Poor (CGAP), a microfinance think tank funded by 34 development organizations and housed at the World Bank, traces the trend to 2001 in the Philippines, where a telecom company, Smart Communications, partnered with banks to provide financial services. The concept spread; by 2005 the South African startup Wizzit had launched a banking and

payment platform for mobile phones. And in 2007 Kenya‘s leading telecom, Safaricom, launched the money transfer service M-Pesa. Yet these efforts to graft developed-world banking onto developingworld mobile networks are not commensurate with the swelling popularity of the mobile phone itself. The larger story is one of pilot projects that petered out amid difficulties including cumbersome national regulations, unfriendly interfaces, and an inability to make the right partnerships. ―The reality of the field today is that the promise–which a lot of people understand is huge–is more in the conceptual stage,‖ says Michael Chu. ―The banking industry is very suspicious of the cell-phone industry, because they suspect that cell phones will make them obsolete. The cell-phone companies think the banks are like dinosaurs.‖ But these players have to work together seamlessly for cell-phone-based banking to work. Both mChek‘s technology and its business model are geared to avoiding such pitfalls, some observers say. The company got its start in 2006, when Draper Fisher Jurvetson spun it out from A Little World–a Mumbai company developing smart cards that the Indian government sought to use as national ID cards–and gave it $4 million in funding. From the beginning, mChek has emphasized security and usability. The software itself runs on any phone (even the years-old used phones sold at many storefronts), and the transactions use simple text messages that work on any network. Moreover, with two forms of encryption plus the usual PIN protection, the system is considered as secure as any card-swiping device in any retail outlet: mChek says it is the only mobile payment platform to have won certification from Visa. And the company isn‘t locked into an exclusive partnership with any one bank or mobile carrier, so it‘s flexible and able to grow. ―What‘s great about what they are doing is that they are working with all of the [mobile carriers] and banks,‖ says Crystal Hutter, a manager of investments at Omidyar Network, the philanthropic investment firm established by eBay founder Pierre Omidyar, which is active in microfinance. ―They are not locking themselves into one operator or one bank. Having the ability to work interoperably is huge.‖ Serious growth became more likely in August, when Airtel decided to incorporate the mChek platform directly into the SIM card–the device inside a mobile phone that identifies the and phone number–on all four million phones it ships monthly to new customers. This means phone owners won‘t have to seek out and mChek‘s software. Airtel is marketing the feature heavily as a way to pay phone bills, in part because it pays mChek less for each transaction than it pays the 800,000 retailers who now accept cash payments (mostly prepaid top-ups) on its behalf. For mChek, then, the task now is to forge more such partnerships and navigate a shifting regulatory environment. Draper Fisher Jurvetson‘s Jolly says that

mChek‘s achievements thus far are unique in India. ―I often talk about [mChek] as a company that is dancing with gorillas or behemoths,‖ says Jolly. ―You have the banking sector on one side and the [telecom companies] on the other side, and then you‘ve got the MasterCard and Visa folks, and finally the regulatory oversight bodies like the RBI. Trying to corral all of them, for a startup, is next to impossible. What mChek has been able to accomplish in India has never been done before.‖ The company does face some emerging local competition. In Bangalore, JiGrahak Mobility Solutions has developed a popular bill-paying and banking platform, but it‘s sticking to the upper end of the market; its service requires the Internet connections available on higher-end phones. In Delhi, Eko India Financial Services is partnering with a local bank to bring no-frills bank s to the rural poor in a pilot project limited to 5,000 people. And Obopay India–the Indian branch of a U.S. firm–is working on developing a mobile microfinance platform in partnership with Grameen Solutions, one of the organizations created by the Bangladeshi microfinancier Muhammad Yunus, winner of the 2006 Nobel Peace Prize. (It is not connected with Grameen Koota in Bangalore: grameen means ―rural‖ or ―of the village.‖) Obopay‘s initiative, called ―Bank a Billion,‖ was scheduled for a rollout in Mumbai and Bangladesh by early November, says Vijay Balakrishnan, chief marketing officer for Obopay India, which hopes to enroll a million people in those two regions within 18 months. In Obopay‘s scheme, the purchase price of a cell phone would be built into a Grameen microloan; bill-paying software would be incorporated into the SIM card; and the borrower would open a no-frills bank s. The difficulty with such efforts is that it‘s not clear how hundreds of millions of poor rural people doing mobile banking would actually deposit and withdraw cash, even if they used their phones for transfers. No nation has yet convinced its citizens to forsake cash-stuffed wallets and convenient ATMs. Sabira Khanam, for example, sells her saris for cash. And she makes cash deposits in a conventional bank (though from there, she will be able to receive and repay microloans electronically under the Grameen Koota/mChek project). ―Today, cell-phone companies by themselves cannot provide the things that banks provide,‖ says Harvard‘s Chu. ―At the end of the day, if this is to be an effective platform, you have to have physical delivery or access to the funds.‖ In India, some existing programs could help bridge the gap. Prodded by government mandates, state-owned banks such as Punjab National Bank, State Bank of India, and Corporation Bank have established outreach programs in recent years. An array of branchless-banking efforts–stand-alone kiosks, portable terminals manned by village

representatives, and banking services delivered through a Kinko‘s-like retail franchise run by a firm called Comat–have appeared in some of India‘s 638,000 villages. One such effort has taken hold in Kasaghatta, a village about 70 kilometers north of Bangalore. Reached by a few kilometers of bumpy dirt road, Kasaghatta does not appear on national maps. Extended families share concrete or thatched houses; women in brightly colored saris scrub pots and lead cows down red-earth alleys; men haul steel buckets of fresh milk to waiting delivery trucks; roosters skitter about. The rocky hills that characterize southern India‘s Deccan Plateau dot the horizon. If you need anything in Kasaghatta, the person to see is Muniyamma Ramanjanappa. A calm and kindly grandmother in her 40s, she manages the village school and serves as its teacher for the primary grades. She‘s also the government‘s point of on health programs for women and children. Government-issued supplies and medicines, as well as financial assistance to local mothers, are routed through her. She frequently travels seven kilometers by bus to the nearest branch of the state-run Corporation Bank, which disburses government benefits. Through her relationship with the tellers, she has become the bank‘s ―correspondent‖ to Kasaghatta. The bank issued her a machine–manufactured by the Bangalore startup Integra Microsystems–that in 2007 brought banking to the village for the first time. Villagers who visit Muniyamma can now use smart cards and thumbprint authentication to deposit and withdraw cash. Muniyamma keeps the cash in a strongbox, reconciles s via a wireless connection to the bank (established over her cell phone), and gives out printed receipts for each transaction. On the day I visited, Muniyamma padded barefoot around her tidy one-room concrete home, where immaculate steel cookware was stacked in the kitchen area. A silver wedding ring encircled the second toe of her left foot; studs adorned both ears and her right nostril; a mint-green sari swathed most of the rest of her. Before long, Jayalakshmamma Doddarasaiah, a 22-year-old mother of two, arrived carrying her 17-month-old son, Mahesha. Jayalakshmamma wanted to deposit 100 rupees from a recent sale of ragi, a local crop similar to millet. She was in a hurry, as it was almost time to milk the cows in her extended family‘s concrete-and-thatch compound two alleys over. Jayalakshmamma slid her smart card into a plastic slot on the side of Muniyamma‘s white metal machine and, after some prompting from the audio interface, placed her left thumb on the reader. The ragi harvest had left her fingers cut and callused, so the machine was unable to recognize her. But other villagers who stopped by had no problems, and the technology is clearly widening their opportunities. For example, a 55-year-old village man named Karehanumaiah was able to deposit 150 rupees.

Until early 2008, he‘d never had a bank or access to formal credit. Borrowing 1,800 rupees from an informal lender to buy a goat would have cost him as much as 10 percent monthly interest. Now he has a savings and can borrow from his bank. Such approaches have their critics; Swamy is one. He says that India could, in fact, become utterly cashless; a man like Karehanumaiah could be paid for his farm labor electronically and buy goods and services the same way. Given that many areas of India have no banking infrastructure at all, he argues, it makes no sense to try to build kiosks and machines. ―Those are nonscalable models and very labor-intensive models,‖ Swamy says. ―If he can do it in his village, he can do it in his pocket [with his cell phone]. That is our perspective.‖ Still, most experts say a wholesale changeover to electronic transactions is unrealistic, and that mobile banking will require some connection to the cash economy. Either way, the technology is there; the issue now is creating the environment necessary to cultivate it. ―First, it will take changes in regulation,‖ says CGAP‘s Ignacio Mas. ―Second, it will take a mind shift by the banks to see opportunities where they haven‘t before. And it will take partnerships: how will the [telecom companies] and banks come together with companies like mChek and other vendors who can bring together the [retail] agents?‖ Nobody has specifically proposed using cell phones for banking in Kasaghatta. But it is plain to see that in the village, all the elements are in place. Not long after watching Jayalakshmamma‘s failed effort to deposit 100 rupees, I visited her home. The scene was one of bare-bones rural living; her parents sat on a floor of packed dirt, holding her daughter. Two cows munched grass nearby. Reaching the interior of the one-room concrete hut required ing through a thatched enclosure housing more cows. But it turned out that Jayalakshmamma‘s husband, like Sabira Khanam, owns a cell phone. I asked Muniyamma how many people had bank s in the village, and the answer came back: 190 of the 700 residents. Then I asked how many owned cell phones. The number was 300, and counting.

CASE STUDY 2 EXPANDING MOBILE BANKING SERVICES WITH SMS Challenge: One of the largest multinational financial institutions in the United States wanted to launch mobile banking services to the more than 40,000 small and mid-sized businesses it serves in India, and it turned to Syniverse to expand its customer engagement with SMS. With the rapid growth of mobile phone penetration in the country coupled with low penetration for fixed Internet access and home PCs, India is a market in which consumers are increasingly demanding more services to be delivered through their mobile devices. Solution: Syniverse answered the financial institution‘s need with a customized international SMS solution developed from Syniverse‘s Mobile Enterprise Services (MES) for Financial Institutions. For more than 10 years, this suite of mobile services has provided the financial institution with a wide range of solutions for empowering holders to take advantage of SMS to access their s, receive alerts, recharge prepaid phones and pay bills. What‘s more, the financial institution has used MES for Financial Institutions to roll out these SMS services as part of a global solution to the more than 150 countries where it does business. Result: ―Syniverse has helped us provide a new level of service to further enable anytimeanywhere banking for our customers. Using SMS, we have been able to empower customers to access and manage their s more quickly, easily and frequently. We‘ve also been able to significantly reduce the time our customers have to spend ing our customercare centers.‖

CONCLUSION:

The banking business has always been different than others businesses because it comes in the services industry and financial services category. Every body making transactions in finance is more conscious about the security of his money. Many times it has been seen that when a customer once cheated in the case of financial matters he looses his belief forever in that particular system and never does the same again. The banks, regulatory authorities and other organizations must try their level best to make mobile banking system as much secure as they can. It should be mistake less and provide maximum security and reliability to the s. The connectivity with innovative modes of transaction in banking like ATMs, Internet Banking and mobile banking always requires lot of attentions from the side of service providers because a small interruption in the system may spread a very bad word of mouth and fear to the customers. The time has come that banks must scale-up the mobile banking infrastructure to handle exponential growth of the customer base. Mobile banking is anytime and anywhere, so that banks need to ensure that their systems remain ready for the same. As customers‟ will find mobile banking more and more useful, their expectations will increase. If the banks will be unable to meet the performance and they may lose customer confidence.

VISIT REPORT

The recent study has shown that the banks have started providing the mobile banking services from 2009 – 2010. In the beginning the banks used the technology of sms messaging. But, now most of the banks started providing the services through web browser and smart phone application. The banks does not have much documentation process. The customers have to fill the KYC form and can avail the service from the next day of submission. Along with KYC the customers have to provide the residential address proof and the customers mobile number. The banks provide them a which the customers have to keep it confidential. The public banks do not charge for this service but the private banks charge their customers at minimal rate. The service is economical for the bank as the cost incurred is very minimal as compared to tele banking. In the beginning of this service the RBI had announced a limit of 50,000 Rs per customer per day. But now, the RBI has eased the limit and thus the customers can transfer the amount without any limit. The banks provide instant service to their customers. The service is delivered within seconds after the transaction. This service is available for all types of s. It has shown that 50 percent of the customers use mobile banking service

BIBLIOGRAPHY

Innovations in banking and insurance (semester iii) vipul Innovations in banking and insurance (semester iii) sheth Marketing in banking and insurance (semester v) vipul Marketing in banking and insurance (semester v) sheth

WIBLIOGRAPHY

http://en.wikipedia.org/wiki/Mobile_banking https://www.sbi.co.in/.htm?action=viewsection&lang=0&id=0,1,21,691 http://www.ehow.com/facts_6805576_history-mobile-banking.html http://voices.yahoo.com/10-features-mobile-banking-6731348.html http://mauconline.net/2013/03/07/advantages-and-disadvantag es-of-mobile-banking/ http://businesstoday.intoday.in/story/mobile-banking-on-the-rise-in-india/1/191851.html http://drslgupta.in/Research%20Papers/Mobile%20Banking%20in%20India%20Final.pdf http://telecomnewsbd.wordpress.com/2008/11/15/mobile-banking-an-indian-case-study/ http://www.business-standard.com/article/companies/airtel-axis-tie-up-for-mobile-bankingservices-112051600124_1.html http://articles.economictimes.indiatimes.com/2012-06-28/news/32457207_1_mobilebanking-internet-banking-banking-sector http://articles.timesofindia.indiatimes.com/2012-12-14/telecom/35819133_1_hdfc-bank-icicibank-state-bank http://www.contify.com/stories/36687732/?fromSearch=news&sort=approved_on&page=1& q=&timeline=&company_tags=Movida%7CN&internal=false

ANNEXURE 1. In which year did your bank start provding mobile banking services? 2. Which type of mobile technology is used? SMS Messaging

Web browser

Smart Phone Application

3. Does your bank have lot of documentation process? YES

NO

4. How many days does it take to provide this service? 5. Are your customers satisfied? YES

NO

6. Is there any unique feature in your bank providing this service? YES

NO

7. Is it economical? YES

NO

8. Do you charge your customers for this service? YES

NO

9. Is there any limit on transaction through mobile banking? YES

NO

10. Does your bank provides instant service? YES

NO

11. Is this service available for all types of ? Fixed deposit

Saving deposit

Recurring deposit

12. How many of your present customers are availing this service?

Current

NEWS ARTICLE: 1.72 crore customers using mobile banking facilities: Govt Around 1.72 crore people are using mobile banking services in the country and private bank HDFC Bank has the largest number of such customers.As on October 2012, nearly 1.72 crore customers are utilising the Mobile Banking Services among the 42 banks which provide the facility.According to the list, private sector bank HDFC tops with 88.88 lakh customer-base for mobile banking.HDFC is followed by public sector banks State Bank of India (SBI) and Corporation Bank with 50.92 lakh and 6.75 lakh customers respectively. Other banks with a large customer base for mobile banking are ICICI Bank (5.49 lakh), Axis Bank (3.51 lakh) and Bank of Baroda (3.17 lakh).Jammu & Kashmir Bank has only 130 such customers, while Central Bank of India has 300 customers

Innovative delivery model to drive banking sector growth: PwC Mumbai: Innovative service delivery models, including mobile banking and ATMs, and the ability to satisfy customers will drive the growth of banking sector in coming days, says a report."Our survey revealed that managing customer experience, new technologies and emerging products and services are the key drivers for these innovations," said the PwC report released at CII Banking Tech Summit 2012 here. The government, however, will have to address the concerns over data security to promote innovation in banking technology."Data security concerns and lack of clarity on regulatory stance are two major roadblocks in the adoption of cloud computing in Indian banks," the report pointed. Customers are constrained for time and are looking for flexibility and 24/7 cross-channel capability, it said, adding today, customers expect to move across different channels anytime

from any place. Penetration of alternate channels has deepened significantly, especially on internet banking and ATMs, it said. Even the mobile banking is emerging as a strong delivery channel, it said. The mobile phone has become an important delivery channel over the last few years. Many banks have already adopted a mobile banking platform and consider it key to attracting and retaining customers, it said. Cost optimisation has been the primary driver for green banking. Key green banking initiatives have all centred on cost savings, including paperless customer communication, electronic payments, etc, it said. These have resulted in a lower branch footfall through increased adoption of alternate delivery channels, it added.

Airtel, Axis tie-up for mobile banking services

Mumbai: Bharti Airtel customers will now be able to open no-frills savings in Axis Bank through their mobiles and will be able to carry out transactions such as cash deposits, transfers and withdrawals. Country's largest private mobile operator Bharti Airtel and Axis Bank Wednesday announced a partnership to provide banking services through Airtel Money platform, a move that will help further the goal of reaching un-banked areas. "Following the recent pan India launch of airtel money, we are today excited to collaborate with Axis Bank to further strengthen our mCommerce proposition for customers," Bharti Airtel CEO - India and South Asia - Sanjay Kapoor said. To begin with, savings and remittance solutions will be provided in Delhi and Mumbai on the sending side, ansd Bihar and East UP on the receiving side. Thereafter, these services may be extended to other remittance corridors in the country, the

company said. "According to estimates, nearly 43 per cent of the country‘s population does not have bank s...The 'airtel money Super powered by Axis Bank' acts as a no-frills bank that comes with remittance capabilities," Kapoor said. Leading IT firm Infosys is the technology innovation partner for the offering. "Our alliance with Airtel will help the Bank to reach out to excluded segments of our population, both in rural and urban centres, with reasonably priced banking and financial services," Axis Bank MD and CEO Shikha Sharma said. PTI