Vodafone and Bharti to Offer Mobile-Phone Banking in India

Vodafone Group Plc’s Indian unit and Bharti Airtel Ltd. have formed partnerships with India’s largest banks to offer phone-banking services.

Vodafone Essar Ltd. will tie up with ICICI Bank Ltd., India’s second-largest lender, and biggest private bank, to offer electronic payments, reported Bloomberg.

Bharti and State Bank of India, the nation’s biggest lender, is going to form a venture to provide money transfer and other banking services on mobile phones.

Mobile operators in India, in the world’s second-biggest wireless-phone market after China, in a bid to boost revenue after competition pushed call rates to half a cent or 25 paisa a minute (too many players with a few big joining the fray in recent year include NTT DoCoMo Inc. and Telenor ASA), are desperately trying to offer new services to stay in the competition.

Through the mobile-phone partnership, both telecom and banking giants want to create a win-win situation for them, by reaching out to more customers including those in remote areas.

Notably, with high mobile reach in India, where half of the population has access to mobile phones(mostly feature phones), complemented by low access to banking services in Remote Areas in India and India in general, mobile banking has a bright future in the country.

NOTE: According to Nov 27 2010 statement of K.C. Chakrabarty, deputy governor of the Reserve Bank of India, Almost half of India’s population has no access to banking services. The government in 2010 decided to tap the infrastructure created through the spread of mobile phones to rural areas to allow banks to reach more customers, TRAI, India’s phone regulator said in a consultation paper in October. --------

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