The country?s largest telecom operator and the largest bank ? Bharti Airtel and State Bank of India (SBI) ? on Wednesday announced a joint venture to provide mobile banking services. The joint venture will become the business correspondent of the SBI. The two companies would invest Rs 100 crore in the beginning and the facility would be launched by March 31.
Under the exclusive arrangement Bharti Airtel would hold 49% equity in the JV and the remaining 51% would be with SBI. An existing Airtel user can open a no frills account with the JV and deposit money in a way similar to bank deposits. The customer can then conduct financial transactions such as money transfers through the mobile phone. A non Airtel user too can go and open a account by acquiring an Airtel number.
In fact, Vodafone-Essar, the country?s fourth largest telecom operator also announced a similar tie-up with ICICI Bank on Wednesday. Both entities will offer a bouquet of financial products such as savings accounts, pre-paid instruments and credit products through a cellphone based platform.
According to a press release issued by Vodafone, ?This partnership is expected to bring the un-banked and under-banked population into the organised financial services framework and assist in furthering the electronic payments market in India. ICICI Bank will leverage the distribution strength of Vodafone, which manages over 1.5 million retail points for acquiring customers and servicing them?.
The Reserve Bank of India (RBI) has over the past few years come out with various measures to facilitate banks to achieve the financial inclusion agenda. RBI has allowed banks to appoint for-profit companies as Business Correspondents (BCs).