Indian regulator disposes of mobile banking charge

Indian regulator disposes of mobile banking charge

The Telecom Regulatory Authority of India (TRAI) has scrapped rates for unstructured supplementary service data (USSD)-based mobile banking and payment services in order to promote the digital economy in the country.

The mobile operators were charging 0.50 paisa per session (or messages) from 2G customers for availing of such services. USSD is a mobile shortcode that enables financial and banking transactions even on feature phones.

After analysing the comments received from stakeholders and other data/information available with it, TRAI is of the view that to protect the interests of the USSD users and to promote digital financial inclusion, rationalisation of USSD charges is required, said the regulator.

"In view of the same, the Authority has decided that the subscribers will not be charged for USSD for mobile banking and payment service. The Authority will continue to keep a watch on the progress of service and may review the charge after a period of two years," TRAI said in a statement.

Earlier in November 2016, TRAI had cut the per-session rate for USSD-based mobile banking transactions to 50 paise from INR 1.50. (USD 1 = INR 76; INR 1 = 100 paise).

Indian telecommunication companies have voiced concerns over the move of making these services free in their submissions back in December, stating that it may increase the financial problems for the in-debt telecom sector. They had requested TRAI to go for a graded cut in tariffs for USSD-based mobile banking and payment services.

However, with immediate effect, the regulator on Thursday decided to scrap charges levied on USSD updates.

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