Yes Bank customers who sign up for the service at branches and ATMs in Mumbai and National Capital Region will be able to instantly transfer money to and from any mobile phone, says Obopay.

Users can either download software to their phone or use the service via SMS or interactive voice response. The recipient of any funds transferred over the system can withdraw the cash using their Yes Bank debit card.

"Together, Obopay and Yes Bank give Indian mobile consumers power over their money no matter where they are," says Aditya Menon, executive director, Obopay India. "This service is built for today's mobile lifestyle, making funds available to consumers anytime, anywhere."

Yes Bank looks set to be the first of several Indian partners for Obopay, which said in January it had struck deals with six banks and three telcos in the country.

The firm has also established a development centre in Bangalore. It will face competition from local mobile payments vendors such as mCheck and JiGrahak, which operates the NGpay platform.