Axis Bank, India’s third-largest private bank, and IDEA Cellular, the pan-India mobile operator, yesterday announced the signing of a Memorandum of Understanding (MoU), whereby Idea will act as a ‘Business Correspondent’ of Axis Bank to provide an entire range of financial products and services offered by the Bank, through the mobile operator’s retail outlets.
The association will be flagged-off with a ‘remittance pilot’ between Dharavi in suburban Mumbai and Allahabad in Uttar Pradesh, which will enable money transfer using the mobile platform. Idea and Axis Bank will also explore extending the association to include other banking products and services such as savings, credit, micro insurance, micro SIP, and micro pensions in a phased manner. On completion of the successful pilot, a full range of banking services is proposed to be launched across the pan-India footprint of IDEA Cellular, subject to receipt of all statutory and regulatory approvals.
Mr. S K Mitra – President, Agri-Business & Rural Banking – Axis Bank, while speaking about the project said, “As a total solutions bank, we are always exploring options to deliver improved and convenient services to customers across all strata of the society. We have already undertaken urban and rural financial inclusion initiatives in parts of India on a POS platform through our Business Correspondents. We were keen to adopt additional delivery channels to drive financial inclusion and were particularly keen on a mobile-based channel, considering the reach and the low-cost service delivery platform. Since only 41% of the adult population have bank accounts, whereas more than 70% of adults own a mobile connection, associating with a telecom service provider looked to be the apt choice.”
Mr. Mitra further added, “IDEA Cellular has the necessary reach and adaptability to drive the initiative and we are happy to be associated with IDEA Cellular in this Pilot Project. Idea’s deep-rooted retail distribution network is ideal for our ‘Branchless Banking’ model.”
AXIS BANK BUSINESS CORRESPONDENT
Talking about the project, Mr. Ambrish Jain, Director – Operations, IDEA Cellular said: “We are pleased to partner Axis Bank in its Financial Inclusion initiative through a pilot based on the mobile-enabled low-cost banking service model. Idea’s mobile technology platform will enable the provision of a gamut of banking products and services to the end customer, and allow cash transactions at select Idea retail points.”
FINANCIAL INCLUSION PILOT PROJECT
During the ‘remittance pilot’, a remitter in Dharavi will be able to remit money back home to his family in Allahabad, through the mobile platform. The remitters have the option of remitting money to the beneficiary through either of the following routes:
Through Account to Account Transfer whereby the remitter, having an account with Axis Bank, remits money to the beneficiary who also has an account with Axis Bank;
Through the IMT module developed and provided by Empays Payments Systems whereby the remitter, having an account with Axis Bank, remits money to the beneficiary, who has a registered mobile connection, but need not have a banking account.
MOBILE FINANCIAL PRODUCTS AND SERVICES
As a part of the association, IDEA Cellular will support Axis Bank’s Financial Inclusion initiatives whereby Idea will act as a Business Correspondent (BC) of Axis Bank and offer the entire range of financial products and services through its retail outlets that will act as Customer Service Points or CSPs.
This association will prove to be a win-win situation for both Axis Bank and IDEA Cellular. On one hand, IDEA Cellular’s extensive network will help Axis Bank gain access to widespread distribution reach and a low-cost delivery channel for offering the financial products and services, based on the mobile platform. On the other hand, IDEA Cellular will have the opportunity to increase value to its customers through the offering of financial products and services.