TRAI issues fresh norms to spread mobile banking

In a move aimed at widening the use of mobile banking services, the Telecom Regulatory Authority of India on Wednesday issued guidelines and a tariff plan for unstructured supplementary service data (USSD) based mobile banking services.

The USSD technology is used by telecom operators to send alerts to their customers. It can be used for pre-paid call-back service, location-based content services and menu-based information services.

Addressing a conference on the new mobile banking regulations on Wednesday, TRAI chairman Rahul Khullar said the aim is to keep costs low and enable access to mobile services across the country.

Apart from banking services, the new guidelines also aim to curb monopolies in cable networks and allow people to keep in touch during emergencies such as floods.

"We have come out with a framework to help bank agents to interface with service providers for the use of SMS, USSD and IVR channels to provide mobile banking services. The authority wants to utilise the benefits of mobile banking for financial inclusion," Khullar said.

A large section of the population, especially in rural areas, does not have easy access to banks, and this facility will help them, he added.

Trai has prescribed that ceiling tariff for an outgoing USSD-based mobile banking service shall be Rs1.50 per USSD session. "Telecom service providers should collect charges from their subscribers for providing the USSD to deliver mobile banking services," Khullar said.

Under the new guidelines, all service providers should facilitate not only the banks, but also the unauthorised agents of banks to use SMS, USSD and IVR (Interactive Voice Response) to provide banking services to bank customers.

The Mobile Banking (Quality of Service) Regulations come into immediate effect, while the tariff order takes effect on 1 January.

TRAI has also demanded that all banks have to tie up with all telecom operators to enable all customers to access their bank accounts, irrespective of the bank or service provider.

''On 30 September 2013, there were about 87 crore mobile subscribers in the country, of which about 35 crore were in the rural areas. The fact that large number of mobile subscribers in rural areas do not have access to banking facilities presents an opportunity for leveraging the mobile telephone to achieve the goal of financial inclusion,'' the TRAI paper on the new regulations said.

The service would allow users to perform basic banking transactions including cash deposits and withdrawals, balance enquiries and money transfers.

The new regulations have been forwarded to the Reserve Bank of India and the finance ministry.