Growth eyed in Indian mobile banking sector

MUMBAI, May 22 (AFP): Hundreds of millions of poor Indians who have no access to financial services could benefit from mobile banking, experts say, as cell phone use grows at breakneck pace. 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. "The potential for mobile banking is enormous, but it will take its own pace to grow," Amit Ahire, analyst at Ambit Capital, told the news agency. One in 10 of the world's mobiles is sold in India, according to technology research specialists Gartner, and the country adds nearly 19 million new mobile subscribers every month, making it the fastest-growing market in the world. An estimated 775 million people are mobile phone subscribers. Yet, at the same time, nearly half of the adult population still does not have a bank account. Combining the two sectors will have benefits not just for consumers but the economy as a whole, analysts say, echoing India's central bank, which wants swathes of rural India brought into the formal financial system. The Reserve Bank of India has allowed 39 banks to launch mobile banking services and recently raised the limit for the amount which can be paid through mobile phones 10-fold, to 50,000 rupees ($1,100).