New Delhi, Feb. 9: The State Bank of India will soon offer no-frills savings accounts on mobile phones.

The project is for those who earn less than Rs 5,000 a month, own a mobile phone but do not have a bank account.

It is estimated that at least 36 per cent of the Indian population fall in this category. They include construction workers (often migrants), vegetable vendors, rickshaw pullers and railway porters.

The system involves the user, a business correspondent, a national-level entity associated with the business correspondent and the SBI.

The transaction of the user on the mobile will be with the business correspondent, which in turn will relay the transaction online, instantaneously, to the national-level entity and onwards to the SBI.

To promote financial inclusion, the Reserve Bank of India has allowed retired teachers, local grocers and public call office (PCO) operators to be hired as business correspondents, who are intermediaries of bankers.

These correspondents will collect deposits and help account holders withdraw cash. They will also sell financial products such as micro-insurance, mutual funds, recurring deposits and provide retail loans.

The correspondents, in turn, are agents of national-level business correspondent organisations, who have tie-ups with banks.

“A customer just needs to go to his local grocer, or a mobile recharge agent or a chemist to get a zero balance account. They can then deposit, withdraw, remit and check balance — all by just clicking a few buttons on the mobile phone,” Abhishek Sinha, CEO of Eko India Financial Services, told The Telegraph.

Eko is a national-level business correspondent, which the SBI has enrolled for its financial inclusion project.

“The biggest use of the phone for the customer is for remittance or sending money home — from say Delhi to his village in Jharkhand — without taking the trouble of visiting a bank branch or writing cheques and getting demand drafts made,” said Sinha.

The SBI plans to hire at least 40,000 business correspondents over the next few years. At present, the SBI has tied up with 10 national-level business correspondent organisations.

Eko operates the SBI mini-account project in New Delhi, the National Capital Region and Bihar and has over 11,000 customers in 350 outlets. “In a day, we have around 950 deposits or withdrawals involving over Rs 4.5 lakh in transactions,” said Sinha.

Experts say banks need to leverage modern technologies such as the Internet, mobiles, smart cards and biometric authentication to provide banking and financial services to the rural population.

Last week, finance minister Pranab Mukherjee had urged banks and their technology partners to work together to reach out to those who don’t have a bank account.