RBI panel suggests standardised, simplified mobile banking services

A technical committee appointed by the Reserve Bank of India (RBI) has recommended standardisation and simplification of procedures for registration / authentication of customers for mobile banking services. It has also suggested adoption of a common application platform (with necessary level of security through encryption) across all banks and putting in place a cohesive awareness programme.

The committee specifically suggested a reduction in transactional cost with necessary assistance from the Telecom Regulatory Authority of India (TRAI), which has prescribed the optimum service parameters as also ceiling on transactional cost for extension of the USSD services by telecom operators to the banks and their agents.

The committee pointed to the fact that of the country's mobile phone subscriber base of 870 million and around 450 million bank accounts, there are only 22 million active mobile banking customers.

Mobile banking transaction is considered economical and has capability of last mile delivery.

The committee has identified the challenges faced by the banks in providing mobile banking to customers in general (customer enrolment and technical issues) and further highlighted the challenges faced in providing SMS / unstructured supplementary service data (USSD) / application-based mobile banking and recommended solutions for the same.

The major challenges identified are registration, M-PIN generation, concerns related to security, bank staff training and customer education.

The 'technical committee on mobile banking' under the chairmanship of B Sambamurthy, director, Institute for Development and Research in Banking Technology, has been constituted to examine the options/alternatives, including the feasibility of using encrypted SMS-based fund transfers using an application that can run on any type of handset for expansion of mobile banking in the country.

RBI also released on its website the report of the 'technical committee on enabling public key infrastructure' (PKI) in Payment System Applications.

Considering the fact that non-PKI enabled payment systems, such as clearing (MICR / non-MICR), electronic credit system, credit card and debit cards contributed 75 per cent in volume terms but only 6.3 per cent in value terms in the year 2012-13, the group has suggested that in order to ensure a safe, secure payment system in the country and to ensure legal compliance, digital technology, such as, PKI may be used.

The report also highlights, among other things, security features in existing payment system applications and feasibility in implementing PKI in all payments system applications. The group has also recommended that banks may carry out in phases PKI implementation for authentication and transaction verification.