The mobile banking ecosystem has got a major recharge with two banking majors, State Bank of India and ICICI Bank, forging joint venture pacts with India's leading cellular operators. While SBI inked a pact with Airtel, private banking major ICICI Bank signs up with Vodafone.

In the last four years, SBI set up 15,000 customer service points of business correspondents as well as 13,000 business facilitators. Airtel has a network of 1.5 million retailers and distributors which will further increase its reach. According to a Reuters report, the two

companies will invest Rs 100 crore ($22 million) initially in the joint venture, which will be incorporated by March 31, 2011.

So far, SBI has reached out to over 1 lakh unbanked villages. "This joint venture will enable us to fulfil our mandate of reaching out to every Indian, leveraging Airtel's distribution network to provide banking services in a cost effective and secure manner," said O. P. Bhatt, Chairman, State Bank of India. Airtel launched its rural drive in 2009 and announced it would set up 17,000 outlets in villages across India.

Vodafone also claims to manage over 1.5 million retail points. The number 3 operator in India has 121 million subscribers. Globally, Vodafone has a mobile money transfer service called M-Pesa, which faced regulatory issues when it was first launched in 2009 in India and did not move beyond the pilot stage. In late 2010, Vodafone reportedly partnered with HDFC Bank to launch another pilot in Rajasthan.

Moderated by RBI's policies, India's m-banking is gaining momentum with cross-partnerships between banks, telcos and microfinance technology firms. SBI in October 2010 acquired 20% stake in Mumbai-based technology services firm A Little World for Rs 80 crore.

A Little World's flagship product is Zero, which has a strong technology focus, using biometrics based ID, RFID smart cards, and NFC (Near Field Communication) mobile phones for enrollment and transactions. ALW has established partnerships with 14 banks in India. Enam  Financial, Bellweather Microfinance Fund, India Financial Inclusion Fund and Legatum Ventures, a Dubai-based private equity fund back A Little World.

ICICI also has a stake in microfinance company Financial Inclusion Network and Operations Limited (FINO Ltd), which has a breadth of investors from the public sector, international investors and private equity holders - UBI, Indian Bank, Corporation Bank, IFMR Trust, Intel

Capital, Mauritius-based HAV 3 Holdings, LIC, HSBC Group's private equity arm and IFC. FINO counts 23 Indian banks as customers, ten MFIs, 15 state governments including Haryana, Madhya Pradesh, Andhra Pradesh, Tamil Nadu, Uttar Pradesh and Rajasthan. According to the

company website, as of December 2010, it has deployed 11065 outlets in 36,562 locations.

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