From Aadhaar to mobile banking, strategies for India’s war on cash take shape
December 23, 2012 at 9:18 pm | Posted in Additional business, Data, Infrastructure, Technology, The Market | Comments Off on From Aadhaar to mobile banking, strategies for India’s war on cash take shapeFrom Aadhaar to mobile banking,
strategies for India’s war on cash
take shape
Mayur Shetty, TNN | Nov 25, 2012, 11.40AM IST
MUMBAI: Very soon bank account holders can access their accounts, transfer funds, check balances and request cheque books by simply punching in *99# from their mobile phones including the most basic GSM handsets.
On Saturday at the annual Banker’s Conclave ( Bancon) in Pune finance minister P Chidambaram outlined the government’s strategy to shift most transactions to electronic mode. The mainstay is to have Aadhaar-enabled bank accounts for all and to transfer government benefits such as pension, scholarships and subsidies directly to individual accounts. The government has set December 2013 as the deadline to banks to ensure that all beneficiaries have Aadhaar numbers linked to bank accounts are immediately given an account if they do not have one.
Another part of the initiative is the electronification of Kisan Credit Cards. Although KCCs were launched way back in ’98 until now they were more like identity cards. On Saturday Bank of Maharashtra, hosts of the Bancon2012, became the first to issue a Rupay KCC -India’s answer to Visa and Mastercard. This will provide KCC holders access to 1.04 lakh ATMs and enable merchant payments as well.
Besides ensuring speedy transfers and reducing leakages banks have a collateral benefit of these measures to eliminate cash. “The total cash in circulation is almost Rs 11 lakh crore, even if Rs 1 lakh crore would come into bank accounts it would go a long way in augumenting resources of banks” said Pratip Chaudhuri, chairman, State Bank of India.
What sets apart the *99# initiative from other mobile telephony services presently offered is that the *99# connectivity is under the Unstructured Supplementary Service Data (USSD) platform where each dial-in results in a live connection with the banks server. This is similar to the system used in pre-paid phones to check balances and numerical literacy would be enough to operate the account. Also since it is not based on SMS or GPRS connectivity and there is no charge on the user.
The government is pushing mobile banking also because it will provide those in remote areas an opportunity to access their Aadhaar accounts even if banks are not around nearby.
The service is the first time banks and telecoms have come together at industry level is the brainchild of the National Payment Corporation of India (NPCI). According to AP Hota, MD & CEO, NPCI the new service best suits India as it is simple and secure as no information is stored in the mobile device. ” Ninety percent of phones used in the country are GSM phones and this service works on all GSM phones irrespective of handset make, cost, operating system or even the telecom service provider” said Hota.
MTNL and BSNL have been the first to get on board and are offering fund remittance facilities. Twenty-three banks including ICICI Bank, Punjab National Bank and Canara Bank have already gone live. The other telecom operators and banks are also coming on board.
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