New Delhi, Jan. 12: Bharti Airtel and Vodafone Essar today signed separate pacts with two banks to offer banking services through mobile phones.
The move will help banks expand their reach, while the telecom companies will have a new revenue source.
Bharti Airtel, the largest mobile phone operator on the basis of subscribers, and the State Bank of India agreed to invest Rs 100 crore to form a joint venture.
State-run SBI will hold a 51 per cent stake in the joint venture, and the new company will be registered by March 31.
Sunil Bharti Mittal, chairman and managing director of Bharti Airtel, said, This will be a complete game changer, leveraging the SBIs exposure in banking along with Airtels 150-million customer base and an ecosystem of over 1.5 million retailers and distributors across India.
Vodafone Essar, the third-largest telecom operator, tied up with the ICICI Bank. Financial details of the pact were not given.
The two agreements come at a time the Reserve Bank has been urging lenders to expand into rural and semi-urban areas. This can be achieved by using the network of the telecom industry, which has 700 million subscribers and is adding more than 15 million a month.
ICICI Bank and Vodafone said in a joint statement that there was huge potential for mobile banking in rural areas, and the tie-up would facilitate access to the financially excluded parts of society.
Telecom operators will benefit, too, as mobile banking will bring in additional revenue at a time intense competition has hurt profitability.
The upcoming third-generation services, enabling faster Internet access and data transfers, will make mobile banking more efficient.
Banking transactions over cellphones are now available for a few services. The tie-ups will allow customers to open accounts and access other products through the telecom companies retail outlets.
ICICI Bank will offer products such as savings accounts, pre-paid instruments and various credit services through Vodafone Essars 1.5-million retail outlets.