New Delhi: Telecom Minister Kapil Sibal said Department of Posts and state-run BSNL should waive-off fees charged on money transfers by people in the Below Poverty Line (BPL) category, under the Mobile Money Transfer Service launched on Thursday.
"I would urge the two departments, as a first step before revising the transaction cost... To ensure that BPL category people, when they send money, do not pay transaction cost at all," Sibal said while inaugurating the service.
Department of Posts with BSNL announced launch of Mobile Money Transfer scheme in Delhi, Bihar, Punjab and Kerala.
Under this service, anyone can transfer money among these states instantly. A sender of money under it will have to fill a form in Post Office while depositing cash and provide mobile number of the person to whom the money is to be sent.
After completion of this process, the system will generate a transaction ID code that will be sent through SMS to the sender, beneficiary and the post office. The system will also generate a secret code that will be only for sender of money.
The sender of money will have to provide the code to beneficiary who will present it along with transaction ID to the destination Post Office to take the money within 7 days from the cash deposit date.
Users of this scheme will be charged Rs 45 for sending money in the range of Rs 1000-Rs 1500, Rs 79 for funds ranging between Rs 1501-Rs 5000 and Rs 112 for money transfer in the range of Rs 5001- Rs 10,000.
Telecom Secretary R Chandrashekhar said one of the objectives of the scheme should be to lower the cost of transaction to enable transaction of even very small amounts.
He said aim should be to make profit through volumes rather than charging high transaction cost.
On the market potential for this service, Sibal said "about 50 per cent people of this country don't have bank account. That means around 600 million people which is more than twice the population of US".
He appreciated the initiative taken by both the government bodies but expressed reservations on the transaction cost for transferring money under the scheme.
"... The man who remits between Rs 1000-1500, the cost is Rs 40. Why a person who has to only remit say Rs 1200 have to pay Rs 40 as transaction cost, " Sibal said.
He said there is no cost on transfer of money between branches of bank and the cost of transaction under the scheme appears to be more expensive then transfer made through banks.
"Most of the people who will be using this service will be people not having bank account which means they are relatively poor people," Sibal said.
The Minister said the departments should make money from the number of transactions but not by keeping transaction charges high.
"Around one-third of the population of this country are migrants within the country which means out of 1.2 billion people, 400 million people are migrants who come here to make a bit of money and transfer it to pay children's school fees or to pay for their everyday expenses," he said.
BSNL CMD R K Upadhyay said the company will consult its technology provider for this service and Department of Posts with regard to Sibal's observations.
Department of Posts' Secretary Manjula Prasher said that this was only a six-month pilot project and modifications will be made based on the response.