The RBI has given an in-principle nod to Bharti Airtel and SBI to launch the GSM-based cellular operators" initiative for mobile money transfers (MMT) from abroad to India and within the country through SMSs.

However, the RBI has given the service providers the option to launch financial services as "not-for-profit companies" under Section 25 of the Companies Act, deterring them from offering services as a profitable bank under the banking regulation.

The service, when operational, will allow mobile users abroad to transfer money electronically via the handset directly to a mobile user in India without the use of a bank account. The potential for the service is enormous as India has over 170 million mobile users as against just 70,000 bank branches.

According to Bharti Airtel, “Money transfer through mobile will generate great value and convenience for consumers in India and across the world. We have sought assistance from RBI and other government bodies to understand the various regulatory requirements.”

“The MMT project is particularly relevant and important for India which is the largest recipient of international remittances from about 20 to 25 million Indians working across 130 countries,” said Dayanidhi Maran, minister for communication and IT, India.