World - You may soon use your mobile phone as credit,debit card

Mansi Tiwari

NEW DELHI: In a development that could completely liberalise mobile commerce, the department of telecommunication (DoT) will soon write to the Reserve Bank of India (RBI) seeking guidance on linking telephone networks with banking services. While the RBI recently announced certain guidelines for mobile banking in India, it only provides for a few basic banking services which can be undertaken through mobile phones. The new DoT move will allow consumers to virtually use mobile phone as a debit or credit card. Sources told SundayET that the ministry would seek RBI's consultation to provide full-fledged mobile banking services to the customers, in line with discussion held between the 13th Finance Commission team and DoT officials on September 18, 2008. According to a senior DoT official, the ministry has so far not taken any initiative on linking telephone networks with banking services, but is keen on it as it will generate revenues, in addition to giving more value to telephone customers. "These services can increase the share of value-added services from the existing 7-8% of total revenues from the sector to almost about 25% which is the case in the developed countries," DoT said to the Commission's team. SundayET has a copy of the discussion paper prepared by DoT.

Explaining how the new initiative would help Indian consumers, Romal Shetty, director at KPMG India, said it would change the entire face of banking in the country. "So far, consumers can make only a few basic transactions through the mobile, but this will mean using your mobile as your credit or debit card. All you have to do is to send a message to make a payment," he said. Mobile commerce in India has been limited primarily to basic banking transactions, purchase of travel tickets and payment of some utility bills, checking your account balance and last few transactions. Sanjiv Mittal, vice-chairman, Bharti Telesoft, that provides mobile banking facility to the customers in collaboration with Barclays Bank feels that both, banking and telecom industry, will have to come together to make mobile commerce a success in India. "There are certain laws to be considered regarding money remittances. Considering the IT security condition, coming together of both is a good sign," he said. Vodafone also offers services like querying bank balance, requesting for cheque book, making stop payment etc. These services are available in association with banks such as HDFC Bank, ABN AMRO and Kotak Mahindra Bank. "Mobile banking is necessary to create access to the remotest of areas. Any kind of convergence is good for promoting mobile commerce. There is nothing better than both the systems coming together to provide a framework," said a Vodafone official. The DoT's interest in the matter is sending positive signals to industry. "If the ministry takes up the matter with the RBI, it will definitely speed up the process. It will not only help the mobile users but will boost banks and even mobile operators to grow further," added Mr Shetty. The DoT has informed the Finance Commission's team that revenues from auction of spectrum for 3G and BWA services could go up to Rs 30,000 cr. The 13th Finance Commission asked the DoT to give the revenue projection from the telecom sector between 2010 and 2015.