Reserve Bank of India (RBI) has appointed a technical committee, comprising senior executives predominantly from the banking and mobile sectors, to examine the feasibility of implementing a SMS-based funds transfer service using an app that can support any type of mobile handset, including feature phones.
RBI hopes that once implemented, the new service will help promote mobile banking in the country. The committee will conduct an in-depth study into the challenges faced by banks in taking mobile banking forward to the desired level. It will also study the challenges faced by banks in introducing the Unstructured Supplementary Service Data (USSD) channel and suggest solutions.
The technical committee will also consider the advantages/challenges of having a single app across all handsets in an SMS encrypted environment. It will submit its report by the end of this year. The technical committee comprises top executives from Institute for Development & Research in Banking Technology, State Bank of India, ICICI Bank, Axis Bank, National Payments Corporation of India, Vodafone India and HDFC Bank.
In India feature phone-based mobile banking is relatively a new concept. Although smartphone penetration has been growing in India, majority of people are still using feature phones and for them, mobile banking remains an alien concept. Therefore, RBI's new initiative is a welcome move that will promote mobile-based fund transfer, even in rural areas.
However, some companies have already implemented feature phone-based fund transfer in India. In February last year, leading telecom operator Airtel launched Airtel Money, which facilitates P2P transactions via feature phones. This April, Kochi Startup Village-based Payd Software Solutions Pvt Ltd launched a payment gateway for businesses which will help them carry out cashless transactions even via feature phones.
(Edited by Joby Puthuparampil Johnson)