Banking on mobiles

PERSONAL FINANCE

Last month, the Reserve Bank of India (RBI) came up with guidelines for mobile banking. Following the regulator’s move, host of mobile service providers and banks are rushing in to offer mobile banking services.

Earlier, banks were offering data-related services like account information, stop payment instruction of cheques and addresses of the nearest ATM/branch on the phone through an SMS. Also, some banks had facilities whereby you could log in to the bank’s website and get account-related details.

The recent guidelines go beyond this. RBI has allowed fund transfer up to Rs 5,000 every day and Rs 10,000 for transactions involving purchase of goods and services. At the moment, these fund transfers are possible within the country only.

In other words, now financial transactions can be made through mobiles. Customers need to download a software application and install it in their mobile phones. Using GPRS, the programme will connect with bank’s servers. Apart from banking transactions, it is also now possible to pay bills, book tickets (train, air and bus) and shop through mobile. “This is possible using the bank account, debit and credit cards,” said Sanjay Swamy, CEO, M-chek, the company Airtel has tied up with for mobile transactions.

Airtel plans to distribute SIM cards with in-built software, which can make your mobile work like a credit card.

Reliance Mobile is tying up with number of banks to provide this service through their existing WAP-based tec-hnology. ICICI Bank, the country’s largest private sector bank, has also started an application – iMobile.

This can be downloaded on handsets with GPRS facility and can be used to view account details and transfer funds.

It will be quite similar to a net banking facility and the charges are likely to be similar. At present, some banks are offering this facility free-of-cost while others are charging annually. For instance, Airtel is not charging the customer for this service.

To take care of the security of such transactions, the RBI’s guidelines have said that all the transactions, even if it is account details through SMS, should be made in a secure environment. “Currently, an SMS passes through multiple parties and it can be decoded easily,” Swamy said.