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TRAI lays ground-work for mobile banking in India with new rules

India came one step closer to having a robust mobile banking infrastructure in place with the notification of the ‘Mobile Banking (Quality of Service) Regulations’ by the Telecom Regulatory Authority of India (TRAI) today.

The regulations are meant primarily to prevent mobile operators from refusing to co-operate with, or providing poor cooperation to, banks that launch mobile banking services.

Many mobile operators themselves have payment offerings, some of which compete with banks’ offerings. Many operators are also in the habit of levying higher charges for SMSes and other signals sent by companies, when compared to those sent by individuals.

The new regulations make it mandatory for mobile operators to open up SMS, USSD (a type of on-screen query) and IVR (auto-voice) to the banks to conduct mobile banking. USSD is now primarily, if not exclusively, used by mobile operators to sell their own services.

The regulations also set a time-frame of 2 to 10 seconds for completing SMS and USSD based transactions. Some SMS have tended to get delayed buy up to hours due to what operators call network traffic issues. For mobile banking, such delays are not permissible.

In addition, network operators have also been told to provide delivery receipts and keep a record of all SMS and voice activities related to mobile banking — to resolve disputes and enhance reliability of mobile banking.

They have also been asked to encrypt the messages to prevent tampering.

It also prohibited service providers from trying to make extra-ordinary profit from mobile banking by increasing the number of SMSes that need to be sent to complete a process.

“Every Access provider shall ensure that for availing the banking services such as cash deposit, cash withdrawal, money transfer and balance enquiry, the customer is able to complete the transaction in not more than two stage transmission of message in the case of SMS or not more than two stage entry of options in the case of USSD and IVR,” TRAI said.

The tariffs applicable for such messages and calls have not been mentioned in the regulation.

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