Mobile banking users to grow 10 times by 2012

The active user base of mobile banking service in India is expected to increase 10 times to cross the 2.5 crore (25 million) mark by 2012, with cost of such transactions being lower than other channels like internet and ATM, a report says.

According to a report by global consultancy firm Celent, mobile banking in India has witnessed 94 per cent growth since 2002 and is becoming a promising nation for such services.

"Celent expects the penetration of India's mobile banking active user base to reach 2 per cent (2.5 crore) by 2012, up from the current 0.2 per cent (25 lakh)," the report stated.

The registered user base for mobile banking in India is about 25 million or 7 per cent of total users, however, out of this active users are only 10 per cent or 25 lakh.

Interestingly, the cost per transaction is lower compared to other channels such as the internet and ATMs, which is the reason banks are leveraging mobile banking as an alternative channel, it added.

The Indian mobile market has see tremendous growth in its mobile subscriber base and has ample room for further penetration with teledensity as low as 36 per cent.

The country is the second largest wireless market in the world next to China and though they are still nascent, services such as bill payments, basic account inquires and fund transfers are gaining popularity.