The Reserve Bank of India has highlighted the absence of collaboration and revenue sharing models between banks and telcos as a key factor in the slow uptake of mobile banking applications by the populace.
In it's half-yearly financial stability report, the central bank identifies the mobile banking channel a key tool in the push for greater financial inclusion.
However, the growth and acceptance of mobile banking as a channel of accessing banking service has been "below expectation", says the RBI, citing low levels of awareness and acceptance by the general population.
Alongside the face-off between the banks and telcos, the RBI also identifies the inability of banks to seed the mobile number with the account number and handset incompatibility as major constraints to growth.
A bank-led model for mobile banking has been adopted In India, with only banks which are licensed and supervised by the RBI permitted to offer mobile financial services. So far, as many as 78 banks have applied for mobile licenses.
In October, the RBI set up a Technical Committee on Mobile Banking to examine the feasibility of introducing encrypted SMS-based funds transfers across all mobile handsets.
The Committee is currently conducting an in-depth study of the challenges faced by banks in taking mobile banking forward and the hurdles to introducing an Unstructured Supplementary Service Data (USSD) channel for person-to-person payments.