RBI appointed a technical committee on mobile banking to conduct an in-depth study of the challenges faced by banks in taking mobile banking forward to the desired level. The Commitee is headed by B. Sambamurthy, Director, Institute for Development & Research in Banking Technology.
Mobile subscriber addition in india increased by 3.16 million in June 2013. Total mobile subscriber base has increased to 873.36 million. Mobile Subscribers in rural india is contributing to more 2.91 mn of the 3.16 mn. USSD Technology is seen as a viable solution to financial inclusion through mobile banking but has a lot of implementation challenges. TRAI has just released a consultation paper for comments from the public.
The committee will also study the challenges faced by banks in introducing the Unstructured Supplementary Service Data (USSD) channel and suggest solutions. USSD can have the advantage of having a single application across all handsets in an SMS encrypted environment.
With the Telecom regulator and Banking Regulator putting their joint efforts in making banking accessible to the excluded section may become a reality sooner.
USSD for Financial Inclusion
TRAI has released a consultation paper on Mobile Banking for Financial Inclusion in its website. The Consultation Paper on ‘USSD-based Mobile Banking Services for Financial Inclusion’ has been placed for comments from the public. Comments can be made upto 11/10/2013.
As per the Census 2011, only 54.4 percent of rural households has access to banking services. The Unstructured Supplementary Service Data (USSD) provides an opportunity to include vast number of rural (non smart phone using) mobile subscribers into the banking mainstream.
Some of the salient features of USSD
- USSD works on all GSM handsets
- Displays application like interactive menu
- No application installation required
- More secure than SMS
- GPRS/3G is not required as it works on voice channel
- Real time session oriented platform
- Average duration per transaction is 2 seconds in comparison to 7 seconds in conventional SMS banking
- Incoming messages are of flash type and do not get stored on the handset
Telecom operators are currently using USSD to solve their customer problems by providing various services like account balance check, activations etc.
Download Consulation Paper PDF