The Union Bank Money service allows users to store and send money on their handsets and to make payments across locations. Users can pay bills or just top-up their own or their families' prepaid SIM cards. They will also be able to do P2P transfers, as well as use it at accepting merchant points to pay for goods and services.

Union Bank Money will let users withdraw money from the bank's national network of 2400 ATMs as well as through Nokia's network of 200,000 outlets. As part of the project, Nokia plans to pre-install the application in Nokia mobile devices.

M.V. Nair, chairman and managing director, Union Bank of India, says: "Once the roll-out is complete in 12-18 months, 'Union Bank Money' will be the single largest network in India to provide mobile financial services to consumers in urban as well as penetrate rural areas to tap the unbanked populous."

Nokia has been actively involved in mobile payments projects in India. The Finnish handset manufacturer made a $70,000 investment in California-based Obopay in March last year with a view to expanding its reach internationally. In February, the two companies kicked off a six-month pilot mobile money project with Yes Bank in Pune.

Teppo Paavola, vice president, Nokia says: "Building an open ecosystem with key partners is the basis to enable mobile money. Such a cross industry cooperation allows connecting unbanked and banked people, bringing financial inclusion that empowers people to run their business and lives in a better way. It also brings down the borders generated by the limitations of cash".

Earlier this week, the National Payment Corporation of India rolled out rules and regulations for a new interbank P2P mobile money transfer service with the support of seven banks, including Union Bank. To participate, both the sender and recipient need to have a bank account and a valid seven-digit Mobile Money ID.