RBI sets up committee to explore potential of encrypted SMS mobile banking

The Reserve Bank is exploring the possibility of providing SMS-based mobile banking on all types of handsets and has formed a committee to consider the feasibility of such a facility.

A Technical Committee on Mobile Banking has been set up to "examine the options/alternatives including the feasibility of using encrypted SMS-based funds transfer using an application that can run on any type of handset for expansion of mobile banking in the country," the central bank said.

The panel will conduct an in-depth study of the challenges faced by banks in taking mobile banking forward to the desired level. At the end of July, there were about 70 lakh users of mobile banking, which is currently offered by 78 banks.

The committee will also "consider the advantages/ challenges of having a single application across all handsets in an SMS encrypted environment," RBI said.

While most Indian use mobile feature phones, smartphones are fast catching up.

The panel will also examine "any other optimum solution" that would take mobile banking to every nook and corner of the country, in addition to drawing a road map for implementing the solutions or options recommended.

The nine-member panel is headed by B Sambamurthy, Director of the Institute for Development & Research in Banking Technology. The committee is to submit its report by December end.