Mobile Banking Products and Rural India: An Evaluation

The Mobile Banking Products and systems have a pivotal role to play in the financial deepening, especially in rural India. The mobile banking systems and products allow a customer to perform banking operations by making use of mobile phones. In most of the developing countries, especially in India, there is more number of mobile connections than bank accounts. The rural India is facing the problem of lack of accessibility to most of the financial and banking products. This paper evaluates the mobile banking products, mechanism, it’s relevance in rural India, implementation systems, it’s feasibility in the Indian banking Sector, initiatives taken by Indian Banks and Government of India. The focal area of the study is the potential growth of mobile banking, especially in rural India, not the actual growth attained. This is because of the fact that 74 percent of the Indian population living in rural India and only 18 percent of the total banking penetration of India is in rural area. Out of 428 million deposit accounts in the country only 30% are in rural areas. In India over 30% of the new mobile phone subscriptions every month are registered in villages yet 200 million mobile phone users are without bank accounts. That is the rate of growth of number of new mobile connections is more in rural India. The spreading of mobile banking products and systems will definitely contributes to erase the rural-urban divide and integrate rural economy with global economy.