Aiming to promote use of mobile banking services across India, telecom regulator TRAI has come out with guidelines and tariff on unstructured supplementary service data (USSD)-based mobile banking services.
USSD technology is used by telecom operators to send alerts to their users. It can be used for pre-paid call-back service, location-based content services and menu-based information services.
"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," TRAI Chairman Rahul Khullar told reporters in New Delhi.
"A large section of the population, especially in rural areas do not have an easy access to banks and this facility will help to tide over that shortcoming," he added.
The Mobile Banking (Quality of Service) (Amendment) Regulations, 2013 have come into immediate effect and the Telecommunication Tariff (56th Amendment) Order, 2013 shall
come into force on January 1, 2014, Telecom Regulatory Authority of India (TRAI) said in a note on Tuesday.
TRAI has prescribed that ceiling tariff for an outgoing USSD-based mobile banking service shall be Rs 1.50 per USSD session.
"Telecom service providers should collect charges from their subscribers for providing the USSD to deliver mobile banking services," the sectoral regulator added.
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, it said.
"On September 30, 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," TRAI said.
The authority said unlike SMSs, USSD messages create a real-time connection during a USSD session. The connection remains open, allowing a two-way exchange of a sequence of
data making USSD more responsive than services that use SMS.
Some banks in the country, such as State Bank of India (SBI) and ICICI Bank, have already launched USSD-based mobile banking services.
However, the authority says the use of USSD-based mobile banking by these banks is at present limited to the provision of value-added banking services to their existing customers.