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In
March 2008, Barclays in India (Barclays), the Indian arm of
Barclays Plc, the major global financial services provider based
in the UK, launched a unique mobile banking initiative in the
country called 'Hello Money'.1
With this, Barclays hoped to expand its customer base in India
despite the restrictions on foreign banks on opening multiple
branches. "Since there are constraints and regulatory hurdles in
branch expansion, we intend to use the mobile banking channel
coupled with business correspondent model to enhance our retail
operations in India,"2
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said Samir Bhatia (Bhatia), Managing Director, India
and Indian Ocean, Barclays Global Retail and Commercial Banking (GRCB).
Barclays had been present in India since the 1970s through its
Investment bank Barclays Capital. However, it entered the Indian
corporate banking and retail banking space much later. Its corporate
banking arm was launched in October 2006 and its consumer and commercial
banking arm in May 2007.3
Though a relatively late entrant into the retail banking space in India,
Barclays had developed a customer base of 600,000 by March 2008. Of
this, 500,000 were credit card customers, according to the bank's Retail
Banking Director, Suresh Gurumani.4
The bank had just five branches in India as of March 2008. But it was
viewing the fast growing Indian market as a big growth opportunity.
In fact, Ahmed Khizer Khan (Khan), CEO, emerging markets, Barclays GRCB,
said that the bank had entered India with a long-term strategy and
described India as 'a jewel in the bank's emerging markets business'.5
Hence, the bank had applied to the Reserve Bank of India6
(RBI) for licenses to open more branches in the country.
However, industry experts felt that foreign banks in India were
handicapped by the fact that there was a limit on their expansion as the
sector had not been opened up fully. They did not expect this situation
to change at least for another year.7
This being the case, Barclays worked around the RBI regulations to
expand its customer base by launching a user-friendly mobile banking
initiative in India.
'Hello Money' provided Barclay's customers with the convenience of
carrying out banking transactions such as fund transfers, bill payments,
requests for doorstep banking, and other banking services, in addition
to making account enquiries, through their mobile phones.
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1] "Barclays India Launches Mobile Banking
Operations," www.economictimes.indiatimes.com, March 4, 2008.
2] "Barclays Taps into Mobile Banking to Expand
Reach," www.sify.com, March 4, 2008.
3] www.barclays.in.
4] "Barclays Taps into Mobile Banking to Expand
Reach," www.sify.com, March 4, 2008.
5] Anita Bhoir, "'India is a Key Market`," www.business-standard.com, March 4, 2008.
6] The Reserve Bank of India (RBI) is the central
bank of India and regulates the Indian banking sector.
7] In 2005, RBI pledged to open its banking market
further after 2009. However, as of 2008, foreign banks in India had restrictions
on opening multiple branches. These banks were also not allowed to buy more than
a 5 percent stake in any domestic bank. |
