India today moved a step closer to making mobiles virtual wallets by launching services that allow seamless and real-time fund transfer from one person's bank account to another through cellphones.

Mobile remittance services, which have done wonders in other emerging market economies like Kenya and the Philippines, are expected to change the retail payment landscape in the country that has over 600 million mobile subscribers and 300 million bank account holders.

The Interbank Mobile Payment Service (IMPS), which currently has seven banks including the largest lender SBI on board, was launched by Reserve Bank Deputy Governor, Shyamala Gopinath.

She said the service has the potential not only to change the retail payment landscape in India but also help push financial inclusion, on the back of high mobile penetration.

National Payments Corporation of India (NPCI), promoted by 10 banks, will act as the settlement agency between banks and deliver the back-end support to the system.

"This is the first-of-a-kind system in the country and the real power would be when it starts delivering in the rural areas," NPCI's Chief Executive, A P Hota, told reporters.

To avail of the service, an account holder will have to get mobile money ID (MMID) from the bank. MMID will be his ID for all mobile-commerce transactions.

The banks will install special application on the mobile phone from where the remitting will be done.

Once the process is complete, the bank account holder can remit money to anyone, provided he has the receiver's MMID and mobile phone number.

In case of a low-end phone, where the application cannot be installed, money can be transfered through SMS.

Initially, the service will be free for the account holder with banks bearing the cost of 25 paise per transaction.

In case of SMS-based remittance, the user will be charged Rs 2 per SMS, which NPCI is trying to get waived-off by talking to mobile phone operators, an NPCI official said.

Currently, the Reserve Bank regulations cap the maximum amount to be remitted through mobiles at Rs 50,000 a day.

Gopinath said the launch of such a service will help in financial inclusion because of the success of mobile telephony in the country.

She said stakeholders in the scheme -- banks, merchants and mobile phone companies -- should work together for greater integration to help reduce the use of cash and encourage the use of "mobile wallets".

Gopinath said, RBI is encouraging the bank-led model for m-commerce, which allows the whole gamut of services like deposits, withdrawals and remittances rather than the less secure non-bank led model.