As per the TRAI Q1 report, the total mobile subscribers in India were around 867 Mn, wherein around 40% were in the rural areas. However, a large number is still deficit of basic banking facilities. In order to fill this gap, TRAI has recently introduced a framework and tariff ceiling, thereby making use of mobile banking to reach the goal of Financial Inclusion.
Financial Inclusion means delivery of banking services at an affordable cost (‘no frills’ accounts) to the vast sections of disadvantaged and low income group.
The new framework will facilitate not only the banks, but its agents too, to interface with the access service providers for use of SMS, USSD and IVR channels to provide mobile banking services. This framework, as prescribed by the Inter Ministerial Group(IMG), envisaged the opening of mobile linked ‘no frills’ accounts.
The customers would be able to perform five basic transactions, viz. cash deposit, cash withdrawal, balance enquiry, and transfer of money from a regular bank account, as well as another mobile linked account.
The amendment also prescribed ceiling tariff of INR 1.50 for use of USSD for USSD-based mobile banking service, per USSD session.
The Unstructured supplementary service data(USSD), is a technology used by telecom operators to send alerts to the users, such as about their prepaid balances, internet data consumption, etc. For example, an airtel customer can dial *121# to perform services like recharge, hello tunes sign up, Internet etc.
As per the note, the telecom service providers should collect charges from their subscribers for providing a USSD channel to deliver mobile banking services. Also, the amendment increases number of stages for completion of mobile banking transaction from two to five.
The regulations will come into force on 1st January 2014.
ICICI bank has also launched its Facebook app, Pockets to bring all major banking activities on Facebook board. Also, the bank partnered with Movida to allow customers pay bills, recharge and book cinema tickets through mobile.
Recently, the Department of Telecom(DoT), has been provided with short code ‘1037’ as a telecom consumer grievances helpline. The move has been taken in order to reduce the gap between the subscriber and the telecom company. At present, the complaints are being filed through customer care centres, which thereby results in unsatisfactory or delay in resolution of grievances. As per the reports, currently, the process is in implementation stage and will be taken forward by the Public Grievances Cell.
With availability of cheaper smartphones, increasing Internet penetration and consumption, and growth of mCommerce, it seems that this is the beginning of a new M-revolution. However, it would take time to implement these efforts and make even rural people comfortable with technology such as mobile banking. But, if successful, this could really change the face of the Indian banking industry.
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