A mobile can now also be used as a bank branch. Led by the

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government’s focus on financial inclusion and taking banking to remote rural areas, Zero Mass Foundation (ZMF), has used mobiles to create bank accounts for making NREGA and pension payments in villages.

The m-governance initiative uses mobile phones with near-field communication, a strip printer and a biometric fingerprint scanner to create bank accounts for rural people and enable them to receive payments. An additional requirement, is the cash box, which contains the cash to be disbursed. The technology was created by A Little World (ALW), sister company of ZMF. “The idea is to run a small bank in a village, without the hassles and costs of having to open an actual branch,” Anurag Gupta, chairman and CTO, ALW and president, ZMF told Financial Chronicle.

Information under the know-your-customer requirement of the banks is provided through these mobiles and the biometric scanner, with the help of a GPRS server. “The biometric equipment authenticates their fingerprints and that’s how they receive their payments,” Gupta said. The initiative was officially launched in 2006 in Mizoram. “The regulatory initiative by RBI enabled this programme to take shape,” Gupta pointed out. The foundation now has 8,000 outlets in 22 states with 40 lakh customers.

Subhash Bhatnagar, adjunct professor, IIM-A, who did a study on m-governance in India, said, “The government is spending a lot on e-governance by putting up kiosks in villages. These kiosks cost a lot and need electricity, which is not always available in rural areas. An internet kiosk costs the government about Rs 1.5 lakh, while this would cost Rs 22,000,” he said.