Abstract Branchless banking or mobile banking is a relatively new approach in our financial, economic and technological perspective. The industry is in the growth stage. According to World Bank, in the introduction stage of this technology, Pakistan was regarded as the fastest growing mobile-banking industry of the world. The progress has declined a bit but a competitive environment is building up in this industry with the entry of Cellular Companies partnering with Microfinance Institutions (MFIs), and a few banks demonstrating a risk-taking strategy by introducing mobile banking initiatives, to capture the unbanked population of the country. According to recent studies by State Bank OF Pakistan (SBP), around 15% of our adult population is using banking services and around 10-15% is using mobile banking. This means that more than 60% of the adult population is unbanked. So, that leaves a wide gap of income that remains unaccounted for, which is affecting the tax-base and the economic efficiency of our country. The reasons behind this gap may be due to economical, social, cultural, religious or educational barriers that exist in our geographical perspectives. The studies show that the other countries in the world like Kenya and India etc are rapidly progressing in this industry, are taking it more seriously. Our purpose in this study is to analyze whether we are lagging behind or not, if yes what are the reasons and what should be done by financial institutions to cover this gap. ________________________________________________________________________________ Introduction Growing technological advancements in the fields of arts, science, medicine, technology and finance induces developing nations to enjoy growth opportunities equally in accordance with the modern world. The interdependency of global economy has increased to such a great extent that economic conditions of one country greatly affect the economic conditions of the other countries across the regions. Now-a-days, developing countries are continuously trying to improve their Arshad (2014). Asian Journal of Research in Banking and Finance, Vol. 4, No.9, pp.261-281. 262 economic conditions and access to cutting-edge technology with their own capabilities and resources, rather than waiting for the developed countries to pass on the technology after the market gets saturated in their regions. Financial institutions like banks, microfinance institutions MFIs and other intermediaries play a vital role in determining the economic activity of a country. In order to achieve a prosperous economy, a country must develop a sound banking system with proper rules and regulations in place. Developed countries are privileged with abroad access to financial services in various forms but there is potentially large number of unbanked population in developing and under-developed countries that can be brought into financial circle to bring an economic boost up. According to a research study, Banking the poor: The role of mobiles done by Robert E. Hinson, almost 90% of population in developing countries is deprived of financial services for loaning or savings, which in turn makes them to remain in poverty for the rest of their life. Financial inclusion may be described as a condition where most of the people have access to basic, appropriate and needed financial services to carry out their financial management. It is attained by spreading financial awareness in the people and providing access to product and services, irrespective of their financial status (the national forum for financial inclusion, 2007). There have been suggestions for the traditional banks to increase their geographical expansion by opening up branches in the rural areas of the countries to reach the unbanked population. But this cannot be possible for the developing countries due to lack of available resources. This is where the mobile or branchless banking intervenes, providing a cost-effective solution where mobile companies and financial institutions can partner along to reach the unattended and unbanked low income population. The agent network of these institutions may work through retail stores, post offices, and gas stations etc., it will create jobs and accessibility issues will be ruled out. Mobile banking is the most efficient, cost effective and developmental cash transfer mechanism that can lead a country to economic prosperity. Mobile phone is the ideal device because it has already access to a large population and is already feasible for all income levels. With the passage of time, banks have developed their services and are adopting different means to increase access to customers by adopting service like online banking which facilitates customers to access their bank accounts from anyplace with internet access. But as cellular services are more easily adopted by customers and attract attention easily, more and more products are getting into the market and many are still in developing stage related to technology called mobile or branchless banking. According to World Bank study, world population is around 7 billion and almost 80% of population is registered user of cellular services, 1.9 billion have bank accounts and 1.8 billion credit cards (World Bank Data, 2013). These figures depicts that a huge proportion of world population is deprived of financial services. Low income population exists in a cash world and avoids availing financial services because of low income, lack of awareness, limited access to financial institutions in rural areas and high service charges associated with these services. All of these factors contribute a large share to keep a major part of population unbanked or unaccounted for.