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The billionaire Sunil Bharti Mittal’s Bharti Airtel offers a mobile wallet service through ’Airtel Money’ in almost all the major cities. It allows customers to load cash up to Rs 50,000 and use it to recharge phone or pay for utility bills, movie tickets or for shopping at malls. The service transfers money instantly just like a credit or debit card. Airtel, with its more than 300 million mobile customers, is not alone in offering mobile wallet services. There are actually two dozen players from telecom companies to Sodexo to Subhash Chandra’s ItzCash card.

They are all licensed by the Reserve Bank of India (RBI) as Prepaid Payment Instruments (PPIs) and have to maintain an escrow account with a commercial bank. No interest is paid on the deposits. The RBI comes into the picture as it regulates acceptance of deposits from the public. Last week, the RBIreleased its draft guidelines for two new categories of banks – payment banks and small banks. The final guidelines will be issued in August after receiving feedback.

The biggest advantage for companies in shifting from prepaid cards to a bank is the right to raise savings and current accounts up to Rs 1,00,000 from a customer. These deposits will get annual interest of four to five per cent and must be invested in government securities that return eight to nine per cent interest.