India's m-banking to benefit the poor

India's poor populace could benefit from mobile banking, experts say. The hundreds of million with no access to financial services may put their faith in staggering pace that mobile phones usage is growing, according to Memeburn.

Banking by phone could transform the workings of the rural economy, but the industry first needs to allay fears about transaction security and overcome low literacy levels and banks' limited reach in remote areas.

Leading figures from the telecoms and banking sectors meeting in Mumbai last week said that mobile banking - including money transfers, bill payments and remittances - was largely untapped, reveals Straits Times.

Meanwhile, AFP reports that the Reserve Bank of India has allowed 39 banks to introduce mobile banking services and recently raised the limit for the amount which can be paid through mobile phones tenfold, to 50 000 rupees ($1 100).

Currently, 5% of mobile phone subscribers are registered for the service and of them, a tiny 0.5% uses it regularly, according to the Business Standard financial daily, quoting industry estimates.

It is thought that 680 000 transactions worth 610 million rupees ($13.55 million) are conducted every month.