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First it was ICICI in January, then Standard Chartered in
February; now Barclays has launched a mobile phone-based banking
service for the Indian mass market. In a vast country with limited
internet infrastructure and relatively understrength branch
networks (ICICI, the largest private sector player, has just 955
branches and 3,687 ATMs), the mobile channel is being rapidly
exploited as a cheap means of communication and distribution.

Barclays is making its service, called Hello Money, available in
both Hindi and English through all GSM handsets on the Airtel,
Vodafone and Idea mobile networks in 40 Indian cities, and says it
will look to extend the service to CDMA handsets in the future. It
is the first functional m-banking launch by the UK-based banking
group so far.

The service offers nine core functions: account inquiry; balance
inquiry; mini statements for the past ten transactions; utility
bill pay to 84 companies across India; fund transfers to other
Barclays accounts; Visa debit or credit card money transfers;
mobile phone top-ups; requests (such as PIN change or requesting a
cheque book); and deposit accounts opening. Unlike the services
from ICICI (see RBI 585) and Standard Chartered (see
RBI 586
), Barclays’ is not free: it will cost customers INR30
($0.73) a month.

Barclays rolled out a dedicated Indian retail banking operation in
May last year with an ambitious plan to ‘redefine’ retail banking
in the country (see RBI 573). It is offering a range of
savings accounts, personal loans, non-resident Indian services and
a total of four credit cards – but it has only four branches, so
maximising distribution is vital.

Helping boost income growth

In its annual results, Barclays recorded a 53 percent drop in
profit before tax at its international retail and commercial
banking excluding Absa division (IRCB ex. Absa), from £518 million
($1.04 billion) in 2006 to £246 million, primarily due to higher
costs (up 32 percent to £1.2 billion). While it did not break out
Indian figures separately, Barclays said its emerging markets
drive, including high-profile retail banking launches in India and
the United Arab Emirates, had boosted income growth.

Overall, Barclays’ IRCB ex. Absa unit saw a 36 percent rise in
customer loans to £39.3 billion and a 37 percent rise in total
assets to £52.2 billion. The number of IRCB ex. Absa branches and
sales centres expanded by 56 percent to 1,348 units.

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