AfDB and YES BANK hold an Indo-African Knowledge Exchange Workshop
Workshop focuses on Cross-Border Mobile Payments and Regional Financial Integration
The African Development Bank Group (AfDB) and YES BANK Limited, India, held a joint Indo-African Knowledge Exchange Workshop on “Regulation of Cross-Border Mobile Payments and Regional Financial Integration” at the Hotel Trident, Mumbai on 29 and 30 March 2012.
The workshop aimed to create a knowledge forum for Indian and African policy makers to discuss the challenges faced by the regulation of mobile financial services across borders; share experiences on the financial inclusion brought about by existing mobile payment systems, and explore ways of promoting financial inclusion by facilitating cross-border mobile money flows - while maintaining regional and national financial stability and integrity.
Dr. K. C. Chakrabarty, Deputy Governor, Reserve Bank of India (RBI), delivered the keynote address. In his address, the Deputy Governor explained the potential for mobile banking to facilitate financial inclusion and integration. “Mobile banking is an exciting prospect for both the countries with over a billion people with mobile phones”, he said. However, he added that “Mobile banking will follow a bank-led model in India, where mobile service providers can be partners rather than the primary banking service providers, as regulated banks will still ‘own the customer relationship”. The Deputy Governor further explained that “Initially RBI permitted banks to have applications that enable customers to access their banking information on their mobile phones. As a next step, RBI introduced IMPS (Interbank Mobile Payment System) to promote real time interbank transactions.”
Ms. Moono Mupotola, Manager, Regional Trade and Integration Division, NEPAD, Regional Integration and Trade Department of the African Development Bank Group, also highlighted the importance of cross-border mobile payments and their implications for achieving Africa’s financial inclusion, regional financial integration, and economic development agenda. “The ‘mobile payments opportunity’ is helping to bring millions of people out of obscurity, because their cell phone gadgets have the ability to facilitate instant access not only to financial services, but also to the rest of the marketplace,” she stated. She went on to explain that “Some African countries, Kenya and Uganda for example, have adopted mobile network operators (MNOs)-led model in developing mobile financial services, and achieved initial success.” However, she added that “sustainable development in cross-border mobile money services in Africa would depend on a partnership in which industry stakeholders, policymakers, and regulators cooperatively share information about customers’ demand and service developments, fill in potential gaps in regulation, and consider improving the ecosystem for mobile payments services”. Ms Mupotola also pointed out that “despite the potential benefits, cross-border mobile payments systems have a number of challenges, including money laundering and terrorist financing risks”, and hoped that workshop would throw light on how regulatory reforms could help address the challenges.
Somak Ghosh, Group President, Development & Sustainable Banking, YES BANK said: “Mobile Banking in India will have to be bank-led rather than primarily through mobile service providers as cost and complexity of regulation will increase if telecom companies also need oversight. The population of the African continent is similar to India, and with a land mass of five times the size of India, it is necessary to find ways to resolve challenges in terms of recovery of credit, and the last mile problem needs to be addressed in order to provide comprehensive banking services. There indeed exists a huge opportunity here.”
The workshop was financed by the Indian Trust Fund that was established in line with the Technical Cooperation Agreement between Government of India and the African Development Bank Group on 28 March, 2010. The fund supports infrastructure, private sector, ICT, trade, science and technology development in African countries through technical assistance, capacity building, organization of seminars, workshops, conference for networking, and knowledge sharing on India’s economic development experiences.