Telenor Pakistan acquired stake in Tameer Micro Finance Bank to introduce the country’s first branchless banking in 2009. Analysts raised eyebrow when China Mobile threw US$5.8 billion for 20% of Shanghai Pudong Development Bank in 2010. SPDP now offers Corporate Mobile Banking Services. It will be, however, grossly inappropriate if the Philippines and Kenya are not credited as the global pioneers of mobile banking.
Now the working group of India’s Financial Sector Legislative Reforms Commission has recommended that the Reserve Bank of India grants ‘limited purpose bank’ licenses to telcos and other industries to promote financial inclusion. Implementing the targeted subsidy scheme at bottom of the economic pyramid is driving the proposed reform.
It talks about a radical new approach “to ensure the unbanked get access to formal and secure payment systems, which includes restricting the central bank’s regulatory grip over payment and settlement systems,” according to the Economic Times.
Citing examples of global payment innovations such as PayPal, Western Union and Kenya’s mobile phone service extending its business to micro-payments, the working group has said that in the Indian context, ‘the parallel would be to permit telecom players to accept financial deposits.’
Payment transactions would get an impetus if telcos are permitted to mobilize deposits and remit them across their customers, the panel has said, urging the Commission to recommend that limited-purpose banking licences be permitted by the RBI.
The panel has said that allowing telecom players to act as limited purpose banks will further the cause of financial inclusion ‘more strongly than the present artifice of requiring telcos to act as banks’ business correspondents’ to facilitate payments.
It should be good enough to prompt the central bank of Bangladesh to revisit its Mobile Financial Services in Bangladesh: An Overview of Market Development. It has been blasphemous to utter the telco-led mobile banking in Bangladesh. Let there be light.