Overseas Indians send home an estimated $22 billion every year. A new initiative announced at the global GSM conference at Barcelona will make these transfers far easier than they are now. Overseas workers would soon be able to send money transfer orders through their mobile phones. The recipients can then get the money through a payments company. They would not need to go to a bank .
Though the plan is still on paper, it is an interesting one. India is home to less than 70,000 bank branches and around 25,000 ATMs. But it has more than 140 million mobile phones. This underscores the potential of mobile banking in India; it is far more than the potential of Internet banking.
The road ahead will be long and rough, till issues such as data security and safe payment gateways are not addressed. But banks and telecom companies will be watching with interest. We hope regulators don’t put up obstacles to protect banks from this new source of competition.