SBI will roll out no-frills saving account on mobile phone for those who earn less than Rs, 5,000/ a month. The project, targeted towards construction workers, vegetable vendors and the likes will involve a BC (Business Correspondent, grocery store owners/chemist/mobile recharge owners in this case), national level entity associated with BC (Eko) and the SBI,
All one needs to do is go to their local grocer (or a BC) to get a zero balance account. They can then deposit, withdraw, remit and check balance — all by just clicking a few buttons on the mobile phone. The BC will collect deposits and help account holders withdraw cash. They will also sell financial products such as micro-insurance, mutual funds, recurring deposits and provide retail loans. [source]
An interesting project that serves the great BoP economy and help them easily remit money to villages. Moreover, SBI’s embracement of such a technology and the bank’s wide network makes it an interesting project to watch out for.
Though the big question remains – what about KYC norms?
Banks like SBI are too stringent on KYC and even though all of this sounds like a great plan (just the way SBI’s offering of collateral free loan to startups/SMEs was, and later turned out to be an eyewash), execution is the only parameter that these projects can be judged on.
Read this interview with Eko founder, Abhishek on social entrepreneurship/entrepreneurial journey.