TRAI sets the tariff structure and guidelines for mobile banking services

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Telecom Regulatory Authority of India (TRAI) has mandated a maximum tariff of Rs 1.50 per transaction for telecom operators to charge a consumer for availing mobile banking services. The Unstructured Supplementary Service Data (USSD)-based service aims to promote use of mobile banking services across India. It also expects to trigger financial inclusion by benefitting large number of rural subscribers who lacks easy access to banking facilities.

What is USSD?

  • USSD technology is used by telecom operators to send alerts, give query information and trigger services to their users. 
  • It is considered to be more responsive service than SMS as it provides two-way data exchange in an open and  real-time connection.
  • The USSD messages travel over GSM cellular networks. 
  • They, unlike SMS and MMS, are session-based protocol and the data can not be stored and forwarded like in the cases of the other two.

Important Points:

  • As of now, banks provides mobile banking as a value-added service.
  • All banks are required tie up with all operators across the nation
  • All service providers must facilitate not only the banks, but also the agents of banks to use SMS, USSD and IVR to provide banking services to bank customers.
  • The rule is scheduled to come into force on January 1, 2014. 
  • Moreover The Mobile Banking (Quality of Service) (Amendment) Regulations, 2013 has already come into effect.

Growing number of mobile subscribers:

  • As per TRAI data (recorded on September 30, 2013) there are about 87 crore mobile subscribers in the country and out of that about 35 crore resides in the rural areas.
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