HANDBOOK ON MOBILE BANKING

` german cooperation DEUTSCHE ZUSAMMENARBEIT ` ` ` ` HANDBOOK ON MOBILE BANKING Regulatory and On-Boarding Guidelines for Regional Rural Banks and Central Cooperative Banks

german cooperation DEUTSCHE ZUSAMMENARBEIT Published by Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH GIZ NABARD Rural Financial Institutions Programme Contact Dr. Detlev Holloh A-2/18, 4th Floor, Safdarjung Enclave, New Delhi 110 029 / INDIA Phone: +91-11-4949 5353 Telefax: +91-11-4949 5393 Email: detlev.holloh@giz.de Homepage www.giz.de Responsible Amit Arora amit.arora@giz.de Author Sunil Aggarwal Editor Nitin Jindal Art Director Anshul Sharma/Artworkstudios.in New Delhi, October 2014 DISCLAIMER Since the guide addresses all SCBs and DCCBs in India, it is possible that the requirements of some banks do not fit into the defined processes. The contents are indicative and supporting in nature. Also the cost heads mentioned in this document are indicative in nature. While every care has been taken to ensure accuracy, banks are advised to exercise their own due diligence and treat this guide only as an additional point of reference. 2 Handbook On Mobile Banking

HANDBOOK ON MOBILE BANKING Regulatory and On-Boarding Guidelines for Regional Rural Banks and Central Cooperative Banks 3

Contents PREFACE... 5 A. SNAPSHOT... 6 B. CURRENT SCENARIO...7 C. REGULATORY PROVISIONS...9 D. IMPS MEMBERSHIP GUIDELINES...11 E. RANGE OF SERVICES...12 F. TECHNOLOGIES...13 G. SELECTION OF MOBILE BANKING SOLUTION...14 H. SELECTION OF Mobile Solution provider(s):...16 I. PROJECT COST ESTIMATES...18 J. OPERATING PLAN... 20 K. ROADMAP FOR IMPLEMENTATION...21 Annexure I - Mobile Banking Transaction Process Flow under different types of Models...22 Annexure II List of non-banking entities authorized by RBI for Pre Paid Payment Instruments...24 Annexure III List of IMPS Members...26 Annexure IV - STK Application on Operator SIM...30 ABBREVIATIONS... 31 4 Handbook On Mobile Banking

PREFACE Mobile phone has emerged as the most effective mode of communication across the globe in all the categories voice, data, images, video downloads/interactive et al. It has already made redundant the use of camera, watch, calculator, diary, video game consoles and i-pod. Downloading of films and online streaming of TV may decrease utility of conventional TV. It is further encroaching upon the use of plastic cards, desk/laptops and tablets to access Internet. It has morphed into a one device solution for all that a person is required to use for work and entertainment. Bluetooth & NFC have increased its connectivity to a variety of other electronic equipment. Innovations in the areas of miniaturization, communication and storage capacities have further strengthened its capabilities. It is thus no wonder that mobile is becoming one of the most prominent channels of banking as well. It is taking over Internet Banking and all other forms of non-cash banking transactions. Even in the area of cash transactions, it may soon replace plastic cards for accessing ATM. It may in fact reduce the very need of cash when the day-to-day transactions between persons/merchants start happening for instant transfer of funds on the spot. Mobile banking is likely to play a very significant role in regard to financial inclusion of vast section of the society residing in remote areas. Due to logistics and commercial considerations, banks are still away from a very large population residing in rural areas. Poorer sections of the society, even in banked areas, are deprived of basic banking facilities since the existing infrastructure is ill-equipped to cater to their requirements. Mobile Banking is expected to play an important role in bridging this gap as it significantly reduces the transaction costs and helps in reducing need for physical cash. In India, so far progress in adoption of Mobile Banking has been a little tardy. This is because of several reasons like requirement of smart phones to do secured mobile banking while most of the population uses ordinary (feature) handsets. This scenario, however, is heading for a rapid change as smart phones are becoming more and more affordable and also Mobile Banking solutions are being developed to provide communication on ordinary handsets. NPCI has recently setup a platform to facilitate inter-bank transactions through ordinary mobile phones. In addition, mobile communication network is fast moving into interior parts of the country which will enable people residing in remote areas to get connected to the mobile communication. All these developments have provided an excellent tool in the form of the mobile for banks to achieve financial inclusion goals by reaching to the common man in every nook and corner of the country. It is not far off when we find a secured and use-friendly mobile banking within the reach of masses in every nook and corner of the country. Banks have recognized the potential of mobile banking. Most commercial banks have launched their mobile banking products to cater to different segments of their client base. These banks are backed by their own data centres, technical, human and financial resources. Their aggressive foray has started yielding results. Following data is indicative of the exponential growth of mobile banking transactions in the recent past: Data relating to Mobile Banking Transactions Month No. of Transactions Amount (Rs. in lacs) December 2013 88,92,790 2,26,130 June 2014 107,28,715 3,98,532 Growth 20% 76% (Source: Reserve Bank of India) In the background of the above, it is crucial that rural/ cooperative banking sector moves on to mobile banking at the earliest. Having already migrated to Core Banking Solution, which is the foundation for on-boarding mobile banking, these banks are now well positioned to move forward even though constraints in terms of financial, technical and human resources are a challenge. Fortunately, several outsourcing models are available to address these concerns. This handbook is intended to familiarize the banks about the mobile banking solutions available in the market, the regulatory provisions and other essential matters of compliance. It also outlines the steps required to be taken to get on-board the mobile banking platform. Handbook On Mobile Banking 5

A. SNAPSHOT i) In terms of guidelines issued by RBI, Mobile Banking transaction means undertaking banking transactions using mobile phones by bank customers that involve accessing/credit/debit to their accounts. ii) Banks having a valid banking license, have to seek one time approval from RBI for starting mobile banking services. RBI has issued detailed regulatory guidelines 1 which the banks have to comply with while conducting mobile banking business. iii) Banks are required to have a mobile banking solution linked to their CBS. iv) To be able to effect inter-bank payments, the Mobile Banking Switch is required to be linked to IMPS, an inter-bank payment and settlement platform setup by NPCI, just like NFS for RuPay Cards. Currently, remittances upto Rs. 2 lac can be done through IMPS. in existence. Annexure I contains diagrammatical description of transaction flow under each model. viii) Banks can also avail the services of ASPs to avoid owning the Mobile Banking Switch (similar to RuPay Card Switch). Some of these ASPs are operating their own Mobile Banking Switch, providing BC and PPI services. These non-banking entities and several other players in the market may be likely vendors for this type of ASP services. ix) Engaging BCs by banks is subject to regulatory guidelines issued by RBI from time to time. x) The structural diagram of mobile banking in India is given below: MOBILE BANKING v) To help banks in providing secured and user-friendly mobile banking services (including inter-bank payments) to their customers having ordinary GSM (not available on CDMA) mobile phones, NPCI has setup a common USSD platform to link different telecom service providers with banks. Directly THROUGH NON-BANKING ENTITIES AS BCs OF BANKS vi) The range of services provided by a bank depends upon the technology(s) adopted by them and the type of mobile phones owned by the customers. Many banks are offering multiple options so that customers having ordinary mobile phones as well as those having smart phones get banking services as per capabilities of their phones. vii) There are several vendors offering mobile banking solutions. The solutions are available on ownership as well as ASP model 2. BC assisted models are also OUTLETS DEDICATED TO INDIVIDUAL BANKS OUTLETS OFFERING MULTIPLE SERVICES INCLUDING THOSE OF BANKS MERCHANTS OFFERING BANKING SERVICES ALONGSIDE THEIR BUSINESS ACTIVITIES 1 RBI Master Circular Mobile Banking transactions in India Operative Guidelines for BanksNo.RBI/2014-15/104 DPSS.CO.PD. Mobile Banking. No. 2/02.23.001/2014-15 dated July 1, 2014 (enclosed in annexure) 2 ASP Model means outsourcing model under which the service provider installs its software solution at his own Data Centre and provides services on the basis of fee per transaction. 6 Handbook On Mobile Banking

B. CURRENT SCENARIO Most commercial banks and major urban cooperative banks are offering mobile banking services. Apart from offering mobile banking services directly to the customers, banks also avail services of non-banking entities as Business Correspondents (BCs) to reach out to wider section of the customers, particularly in the remote areas. These non-banking entities include authorized PPI issuers as well as others. These BCs often operate their own mobile banking platform, linked to CBS of the bank. Alongside banking services, they also cater to various other financial service providers. Some BCs also offer dedicated BC outlets for individual banks. Apart from banks, many other non-banking entities are engaged in payment services/mobile wallet services. They require authorization from RBI under the PSS Act, 2007 for setting up and operating Payment System in India. At present, 30 non-banking entities have been authorized by RBI for issuing Pre-Paid Payment Instruments (PPIs)3. These non-banking entities can offer closed system and semi-closed system PPIs (not permitted to issue open payment system PPIs). RBI has issued detailed guidelines for issuance and operation of Prepaid Payment Instruments. Annexure II contains the list of these nonbanking entities. Inter-Bank Transactions Inter-bank remittances/payments may be facilitated through RTGS/NEFT as well as IMPS (Immediate Payment System setup by NPCI) in case of banks connected with both. Banks not connected to RTGS/NEFT can offer inter-bank transfers through IMPS. To be a member of the IMPS, the banks have to be either a direct member of payment settlement system or have to come through sponsorship by a direct member bank, similar to membership Banks Having Permission to provide Mobile Banking * List of Banks permitted to provide Mobile Banking Service in India PUBLIC SECTOR BANKS 26 OLD PRIVATE SECTOR BANKS 14 NEW PRIVATE SECTOR BANKS 6 FOREIGN BANKS 11 URBAN COOPERATIVE BANKS 19 GRAMIN BANKS (Regional Rural Banks) 11 STATE & DISTT CENTRAL COOPERATIVE BANKS 2 TOTAL 89 RRBs and SCB/DCBs having Permission to Provide Mobile Banking Service GRAMIN BANKS 1 Baroda Gujarat Gramin Bank 2 Baroda Rajasthan Gramin Bank 3 Baroda Uttar Pradesh Gramin Bank 4 Andhra Pragathi Grameena Bank 5 Jhabua- Dhar Kshetriya Gramin Bank 6 Madhya Bihar Gramin Bank 7 Pallavan Grama Bank 8 Pragathi Gramin Bank 9 Shreyas Gramin Bank 10 South Malabar Gramin Bank 11 Uttarakhand Gramin Bank SCBs/DCCBs 1 The Kangra Central Cooperative Bank Ltd. 2 The Tamil Nadu State Apex Cooperative Bank Ltd. Source: RBI *Position as on September 1, 2014 3 Pre-Paid Payment Instruments (PPI) are stored value Instruments, defined under 3 categories i) Closed System - for facilitating the purchase of goods and services from the issuer ii) Semi-Closed System - for purchase of goods and services, including financial services at a group of clearly identified merchant locations/ establishments which have a specific contract with the issuer to accept the payment instruments iii) Open System - for purchase of goods and services, including financial services like funds transfer at any card accepting merchant locations (point of sale terminals) and also cash withdrawal at ATMs/BCs. Only banks are given permission by RBI to issue Open System PPIs. Detailed guidelines contained in RBI Master Circular No.RBI/2014-15/105 DPSS.CO.PD.PPI.No.3/02.14.006/2014-15 dated July 1, 2014 Handbook On Mobile Banking 7

process for joining card payment system. The membership of this is open to banks as well as non-banking entities authorized by RBI for PPI. NPCI has laid down detailed guidelines, technical specifications, process and procedure for membership and conduct of business. NPCI provides guidance and support to banks as and when they approach NPCI for membership. As on date, 68 banks and 8 non-banking entities are members of IMPS. Annexure III contains the detailed list of the same. Emerging Developments a) Recommendations of Technical Committee of RBI RBI had set up a Technical Committee of RBI on Mobile Banking which submitted its report in January 2014. The report has suggested several steps to be taken to increase mobile banking usage. The committee has called for steps to be taken to Simplify mobile registration process to avoid visit to branch Simplify and standardize M-PIN generation process Introduce One Time Password (OTP) Facilitate merchant payment using just mobile number and M-PIN/OTP on the merchant interface Train staff Educate and handhold customers The committee has recommended banks to Implement multiple channels SMS, USSD, application etc. Introduce encrypted SMS in application based mobile banking Simplify P2P transfer using mobile number and account/aadhaar number Facilitate use of a single or common USSD number/ SMS short/long codes/ivr number/mobile application across all banks. Increase limit of unsecured transaction (without end to end encryption) from the existing Rs.5000/- to Rs.10000/- subject to having certain velocity checks at the bank side. Banks may take the decision as per their security policy and internal risk management control measures. MNOs should provide mobile number from where the banking transaction has originated. The committee has submitted recommendation for each type of Mobile Banking Solution as under: i) Recommended solution for SMS based mobile banking Use of common mobile banking application which will enable the use of encrypted SMS messages for mobile banking transactions Use of common mobile banking application preferably using STK (SIM Application Tool Kit) applications for mobile banking. Common application to be standard menu-driven and interactive for use by all banks to avoid need for customer to remember or know the SMS syntax. Consider adopting STK application which encapsulates and sends encrypted SMS to pre-defined number - ensures end-to-end security, and can be used for transactions of higher values. User not required to know the SMS short code or long code number ii) Recommendations for USSD based mobile banking Implementation of the TRAI regulations must be expedited by all the stakeholders. Banks should tie up with MNOs to offer these services directly to their customers Implementation of common USSD gateway for mobile banking should be expedited which would help avoid the need for each bank to tie-up with a large number of MNOs iii) Recommendations Application based mobile banking Common mobile application may be developed and distributed, having standard common menu containing the minimum and most required transaction set. Recently, RBI has permitted domestic leg of international money transfer transactions to be processed through IMPS platform. The banks and financial institutions engaged in international remittances can now credit the beneficiary accounts in India real time, if the remitting institution can carry out Anti Money Laundering (AML) verification real time. 8 Handbook On Mobile Banking

C. REGULATORY PROVISIONS i) For Banks 1. Mobile banking and Mobile banking transactions have been defined by RBI as under: a. Mobile banking - Use of mobile phones as medium for extending banking services b. Mobile banking transaction - Undertaking banking transactions using mobile phones by bank customers that involve accessing/credit/debit to their accounts 2. RBI allows banks to offer mobile banking services. 3. Banks are required to obtain one time prior permission from the Department of Payment & Settlement Systems, Reserve Bank of India for starting mobile banking 4. The permission is granted subject to compliance with the Regulatory & Supervisory Guidelines issued by RBI 4 for carrying on the mobile banking services. The guidelines are applicable to all commercial banks (including Regional Rural Banks), Urban Cooperative Banks, State Cooperative Banks and District Central Cooperative Banks. 5. For RRBs/DCCBs/UCBs, the RBI permission for mobile banking is not necessary to on-board IMPS network as beneficiary (inward remittances). The settlement for these transactions will be done through sponsor bank s account. 6. RBI has issued master circular containing operative guidelines for banks on mobile banking transactions. Key provisions of the guidelines relating to regulatory and supervisory issues are: a. Banks, licensed, supervised and having physical presence in India, are permitted to offer mobile banking services. Only banks who have implemented core banking solutions are permitted to provide mobile banking services. b. The services shall be restricted only to customers of banks and/or holders of debit/credit cards issued as per the extant Reserve Bank of India guidelines. c. Only Indian Rupee based domestic services shall be provided. Use of mobile banking services for cross border inward and outward transfers is strictly prohibited. Recently, RBI has permitted processing of domestic leg of international money transfer transactions through IMPS platform. d. Banks may also use the services of Business Correspondent appointed in compliance with RBI guidelines, for extending this facility to their customers. e. Banks are permitted to offer mobile banking facility to their customers without any daily cap for transactions involving purchase of goods/services. However, banks may put in place per transaction limit depending on the bank s own risk perception, with the approval of its board. f. Remittance of funds for disbursement in cash i) Banks are permitted to provide fund transfer services which facilitate transfer of funds from the accounts of their customers for delivery in cash to the recipients. The disbursal of funds to recipients of such services can be facilitated at ATMs or through any agent(s) appointed by the bank as Business Correspondents. The recipient can be a non-account holder also. ii) In case of cash out, the maximum value of such transfers shall be Rs 10,000/- per transaction. Banks may place suitable cap on the velocity of such transactions, subject to a maximum value of Rs. 25,000/- per month, per beneficiary. iii) The disbursal of funds at the agent/atm shall be permitted only after identification of the recipient. Banks are required to carry out proper due diligence of the persons before appointing them as authorized agents for such services. iv) Banks shall be responsible as principals for all the acts of omission or commission of their agents. g. Transactions up to Rs. 1000/- can be facilitated by banks without end-to-end encryption. The risk aspects involved in such transactions may be addressed by the banks through adequate security measures. h. The guidelines issued by the Reserve Bank on Risks 3 RBI Master Circular Mobile Banking transactions in India Operative Guidelines for Banks No.RBI/2014-15/104 DPSS.CO.PD. Mobile Banking. No. 2/02.23.001/2014-15 dated July 1, 2014 Handbook On Mobile Banking 9

and Controls in Computers and Telecommunications vide circular DBS.CO.ITC.BC. 10/31.09.001/97-98 dated 4th February 1998 will apply mutatis mutandis to mobile banking. i. The guidelines issued by the Reserve Bank on Know Your Customer (KYC), Anti Money Laundering (AML) and Combating the Financing of Terrorism (CFT) from time to time would be applicable to mobile based banking services also. j. Banks shall file Suspicious Transaction Report (STR) to Financial Intelligence Unit India (FIU-IND) for mobile banking transactions as in the case of normal banking transactions. k. Besides aforesaid, the RBI Guidelines include provisions in regard to: Registration of customers for mobile service Technology and Security Standards Inter-operability Clearing and settlement for inter-bank funds transfer transactions Customer complaints and grievance redressal mechanism Transaction limit Remittance of funds for disbursement in cash Board approval ii) For Non-Bank Payment Service Providers RBI authorizes non-banking entities to operate as payment service providers under the PSS Act, 2007 for setting up and operating payment system in India for issuing stored value instruments (Pre-Paid Payment Instruments) on mobile. Detailed Policy Guidelines are contained in RBI s Circular No. RBI/2014-2015/105 PSS.CO.PD. PPI.No. 3/02.14.006/2014-15 dated July 1, 2014 (refer annexure). Banks are advised to refer to circulars/notifications issued by Reserve Bank of India from time to time to get the latest status. 10 Handbook On Mobile Banking

D. IMPS MEMBERSHIP GUIDELINES 1. Both banks and PPIs to have mobile banking license from RBI 2. Banks to comply with NPCI specifications 3. Banks to integrate IMPS services and related queries in their Customer Service Support system 4. Banks to submit information to NPCI from time to time, like: a. Total no. of bank s registered mobile banking & SMS alerts customers. b. The peak level mobile banking transactions volume in terms of number and amount (in rupees) handled by the bank s switch on any particular day so far both intra-bank and inter-bank c. Current System (HW/SW) sizing to handle peak number of transactions/day for mobile banking. d. Current System (HW/SW) sizing to handle peak number of transactions per second for mobile banking. e. Statistics relating to IMPS transactions Handbook On Mobile Banking 11

E. RANGE OF SERVICES The range of services being offered by the banks is very wide and varied. Listed below is the broad range of services: i) By Banks 1. Services being offered include Bank Account related activities like Funds Transfer / Instant Funds Transfer (through IMPS/NEFT)/ Bill Payment / Balance Enquiry / Cheque Book Request / Last 5 Transactions / Stop Cheque Request / Cheque Status Enquiry / Open a Fixed Deposit / Open Recurring Deposit 2. Other add-ons like Credit Card, Demat, Loan, Mobile/ DTH Recharge, Movie/Air/Bus Ticket, etc. 3. Mobile Payment/Wallet Services - through tie-up with service providers like m-pesa, mrupee, Oxigen e-paisa, Aircel Mobile Money, Airtel Money etc. 4. Cash deposit/withdrawal facilities thru tie-up with BCs dedicated outlets/bc owned outlets. These BCs are primarily of 2 kinds: Having their own BC outlets to cater to various banking/financial companies to sell their products and services. These BCs are generally having their own mobile based transaction software solution which is connected to the CBS of the bank/s. Outlets dedicated to a particular bank, directly connected to their CBS. 5. Many banks are offering multiple options, based on different mobile communication channels. For example one large private sector bank offers a bouquet of following options: WAP based application compatible with the handset having GPRS USSD based application which is available on all GSM handsets SMS based application - available on all handsets across all operators but with restricted functions and amount limit specified by RBI due to insufficient security of this communication channel. Call to pay services - IVR 5 mobile banking Smart Phone based mobile banking facility, offering a wide variety of services, almost comparable to the facilities available on Internet Banking. ii) By Non-Banking Entities 1. Prepaid Payment Instrument (PPI) Issuers These non-banking entities are authorized by RBI to offer mobile wallet & payment services and they operate their own mobile banking platform (Oxigen, PayMate, Airtel Money, m-pesa, mrupee, Aircel Mobile Money etc.). They are primarily engaged in payment/remittance services. Some of them have also taken membership of IMPS. In addition to their PPI business they may also operate as BC of banks, managing services like account opening, cash deposit, transfer to bank account (NEFT), IMPS transfer, balance check, mini statement, airtime recharge, DTH recharge, rail ticket booking and movie ticket booking. They offer various types of products some backed by their own platform and others linked to a bank account. For example, Airtel (MNO) offers: Airtel Money which offers 3 different types of accounts Express Account, Power Account and Super Account. Out of these 3 types, Power and Super Accounts are KYC verified accounts offered in partnership with banks. Cash withdrawal is available only on the Super Account which is linked to bank account in Axis Bank 2. Other Non-Banking Entities a. Some companies are not authorized for PPIs but operate as BCs of banks, offering services like account opening, cash deposit/withdrawal, funds transfer, balance enquiry etc. b. Some of them operate dedicated outlets for the banks; while others have their own independent outlets/bc networks, providing financial products/services such as mobile/dth/toll Recharge, utility payments, insurance, movie tickets etc., operating on their own mobile based transaction software solution. Examples Oxigen, Sub-K, Eko etc. 5 ivr (Interactive Voice Response) is a technology that allows a computer to interact with humans through the use of voice and DTMF tones input via keypad 12 Handbook On Mobile Banking

F. TECHNOLOGIES Banks can use various technologies for mobile banking services. A brief description of the various modes is given below: 1. SMS (Short Messaging Service) a. Technology is available on all types of phones b. Operates on normal SMS platform using both push and pull messages c. Easy to access but requires customer to remember syntax for each activity d. Cost of SMS borne by the customer (unless bank has entered into any arrangement with the Mobile Network Operator) e. High Security concerns 2. IVR (Inter-active Voice Response) a. Transaction is through inter-active voice navigation b. Supported on all types of Mobile Phones c. Not very convenient and time consuming as the customer is required to dial up to get connected d. Call charges applicable e. Need of Back-up human support 3. USSD (Unstructured Supplementary Service Data) a. Operates on ordinary GSM mobile phone (not available on CDMA phones) b. Menu driven form of SMS and hence easy to operate c. NPCI has setup a common USSD Platform (NUUP) for all banks instead of each bank having to develop its own platform. It provides access to all MNOs on GSM technology through a single integration with NPCI. It provides mobile banking service on even ordinary mobile phones as it does not involve downloading of any application on the phone. It operates with One number (*99#) for every customer to access irrespective of the telecom service provider, mobile handset make or the region across India and can be used at BC/POS terminals also. Currently 29 Banks have enrolled for this facility. The upper limit on transaction fee payable to MNOs has been fixed at Rs.1.50 per transaction by TRAI. Please see the following link for NUUP videos from NPCI: English: http://www.youtube.com/watch?v=kycsxtdhjw s&feature=youtu.be Hindi: http://www.youtube.com/watch?v=iahznkyydls 4. WAP (Wireless Access Protocol) a. Internet based service b. Available on all GPRS enabled GSM/CDMA phones c. Costly to end users as data and roaming charges may apply d. May require customization to suit different types of mobiles 5. Mobile Application a. Require down loading mobile application of the bank on the mobile phone of the customer b. Require GPRS and compatible handset for the type of application developed by the bank c. Does not suit customers having ordinary mobiles and those not having sufficient exposure to technology 6. STK (SIM Tool Kit) Based This application is embedded on SIM Card. Transmission of data can be either SMS or GPRS (data) channel. It can be used by any customer, irrespective of handset and can be standard menu-driven, interactive and user-friendly. RBI has recommended for its introduction in India. Annexure IV contains details about the technology. Handbook On Mobile Banking 13

G. SELECTION OF MOBILE BANKING SOLUTION Key factors in regard to selection of Mobile Banking Solution are: 1. Business Plan - Customer Profile, Geographical segment, Product Offering a. Is it Financial Inclusion or business development; or both? b. Which segment of Customers is to be targeted; urban, rural/semi-urban, unbanked, educated only, upper layer or all? c. What products are to be offered Cash/Non-cash, Self Operated/Assisted, Other Services Basic Banking/ Basic Banking + Recharge, Bill Payment etc? d. If cash deposits/withdrawals cannot be serviced through the bank branch would the bank like to set up a BC network and/or Point of Sale (PoS) merchant network (see RBI circular in annexure) as well? e. How many customers are expected to be covered by the mobile banking initiative? Will this base grow annually? How many transactions are expected from each customer annually? What types of transactions? f. Which category(s) customers will be signed up for mobile banking? Are they in a specific geographic area? Are they in a certain income category? What areas will the pilot cover and how will the initiative be scaled across the bank? What bank infrastructure is currently available to the target group? g. What is the mobile network coverage across the planned deployment areas? Is the signal strength adequate? Are there frequent outages? What kinds of phones are normally used by the target customers? What is their level of literacy? 2. Available Resources IT Infrastructure, Human Resources, Financial Resources a. Own Data Centre or Hosted Data Centre or ASP? b. Is the CBS connected to the NFS either directly or through an ASP? c. Whether sponsor bank can permit use of its own Mobile Banking Switch (in case of RRBs in particular)? d. Whether trained human resources are available to manage switch, operations, customer service? e. Financial strength to bear the capital expenditure involved in acquiring switch, Micro-ATM etc? 3. Facility for Cash Deposit/Withdrawal Facility through Mobile Banking a. If the mobile banking customers are in the vicinity of the branches of the bank, it may not be necessary to look for any additional infrastructure b. If the mobile banking customers are in remote areas, bank may consider PACS to provide this facility (similar to merchants) through PoS connected to the Mobile Banking Switch 4. Mobile Banking Technology a. For Basic Banking Transactions - Balance Enquiry, Latest Transaction List, Balance Transfer and for Cash Deposit/Withdrawal: i) SMS based Banking Not considered a very safe and convenient mode as messages are stored, un-encrypted and message format difficult to remember Can be suitable for small value transactions Operable on any handset and on all Mobile Networks Banks to use their NPCI connectivity to route other NPCI network linked banks accounts ii) USSD based Banking Suitable only if the Mobile Network Operators in the area use GSM technology. Subscribers of CDMA mobiles would not be able to avail the facility. Session based communication, relatively safe and convenient mode of communication No Transaction Limit specified by RBI Operable only on GSM handsets and does not require a smart phone Operable only on the GSM Mobile Networks operating in the area Banks to link to NUUP of NPCI to provide interbank remittance facility 14 Handbook On Mobile Banking

b. For Mobile Banking with value added services like Mobile Recharge, Bills Payment, FD request etc., the banks opt for Mobile Application based solution. These solutions require downloading of the Software Application on the Mobile Phone and therefore only those customers would be able to avail these facilities who have smart phones. 5. Mobile Banking Model a. If the bank is operating its CBS and Card Payment Switch on ASP Model, the mobile banking solution should also be on ASP basis. b. If the bank has CBS at its own Data Centre or on hosted Data Centre but Card Payment Switch on ASP Model, bank may explore both the options i.e. whether to have mobile banking on hosted CBS or to engage ASP. c. If the bank has its own Data Centre and its own Card Payment Switch, the bank may find it more beneficial to acquire and manage the mobile banking switch. 6. Cost Estimates a. Some of the cost heads apply to all models, like Annual Technical Support, Training, and Connectivity to CBS & IMPS etc. On the other hand, other costs will vary upon model like cost of solution, transaction fee, providing BC services etc. b. The cost of acquisition of mobile banking solution depends on a number of factors like type of solution, volume of business, customization, existing CBS and NPCI connectivity scenario, acquisition model (ownership or ASP) etc. At present mobile banking on ASP being only at the evolving stage, the cost estimate can only be bank and products specific. Even a ballpark figure would be a wild guess work only. The illustrative list of various cost heads is given below. Aforesaid information will help the bank to take decisions with regard to: - Selection of the target group and geographic areas - Selection of the relevant mobile banking model - Selection of the right mix of banking and non-banking services - Selection of the mobile banking solution S.No. Cost Head Narration 1 Customization Charges Customization of Solution as per individual bank s requirements 2 Channel Support Charges Charges for providing BC services 3 Development of Additional Modules If modules are to be developed in addition to the ones provided in standard product 4 Purchase of Devices Cost of POS Devices linked to Mobile Banking Switch 5 Connectivity with CBS Cost of connectivity Mobile Banking Solution to the CBS 6 Connectivity with NPCI Cost of connecting to the IMPS 7 Connectivity to Merchants / Aggregators / Gateways Wherever applicable 8 Training Training to bank IT /Operating staff 9 Fixed Fees Upfront Fee for Installation of Mobile Banking Switch 10 Transaction Fees Applicable on ASP Model 11 Commissions and Revenue Share Applicable to BC Services Provider 12 Support Fees Annual Maintenance/Technical Support Fee 13 Telecom Fees Fee payable to Mobile Network Operator for carrying the mobile communication 14 Switching Fee payable to NPCI As specified by NPCI from time to time. Currently 0.50 per successful transaction 15 Interchange Fee structure as below (Payable by Remitter Bank to the Beneficiary Bank) Successful Transaction value upto Rs. 25,000 Rs. 1. Successful Transaction value Rs. 25,001 to Rs. 2 Lacs Rs. 5 Handbook On Mobile Banking 15

H. SELECTION OF Mobile Solution provider(s) The Solution may be used for various financial inclusion and mobile banking initiatives of the bank. Bank may use it for BC operations as well. Therefore, the solution provider is expected to have products, services and capabilities to provide an end-end comprehensive infrastructure to implement mobile banking solutions and services for the bank. The technology solution/platform is expected to integrate with the bank s core banking system and financial switches, integrate with mobile network operators, and integrate with various third party aggregators and service providers for seamless connectivity. Banks may consider following key criteria for selection of the solution provider: 1. Core Functionality a. Banking and Non-Banking Transactions most of the solutions/vendors support basic banking transactions such as account openings, deposits, withdrawals, balance enquiries and remittances/transfers. Equally important is support/availability of non-banking transactions. Though these services may not be immediately needed, it will provide added value to customers later and become a revenue source for the bank/bc agent. b. Assisted and Self Transactions availability of both assisted transaction and self-transaction models. c. Ownership and Hosted Models the mobile banking service provider must have the ability to offer the mobile banking solution in both models ownership and ASP to enable the evolving needs of the bank. d. Cash Dispensation Operations some banking transactions can be fully done by the customer using his/ her mobile phone, while other transactions will need the assistance of an agent. This is especially the case for cash based transactions. A merchant agent network may be needed in remote areas to provide these assisted services. e. Integration and Standards capabilities for integration with CBS, IMPS, UIDAI, other banks, switches, merchants, aggregators and gateways etc., to ensure seamless operations. 2. Technology Maturity a. Multiple Service Delivery Channels availability of multiple service delivery channels (SMS, IVR, USSD, and App etc.) to provide flexibility to bank to select suitable channel(s). b. MNO Carrier Agnosticity - availability of services for customers through any mobile network operator. c. Compatibility ability and ease with which the solution can be linked with additional services, functionality, channels and partners. d. Scalability and Replicability robustness of the technology architecture, scalability of the solution and the ease of extending the solution to other participating banks. e. Hosted Model support of both ownership and hosted/managed models for the mobile banking platform solution. Flexibility to switch from hosted to ownership model or vice versa. 3. Vendor s Credentials a. Product Roadmap future product / services that will be introduced by the mobile banking service provider. b. Costing and Commercials total cost of ownership for the selected technology / service as well as the ability to price based on usage. c. Mobile Banking Service Provider Experience - prior implementation and project experience by the mobile banking service provider. 4. Illustrative List of Mobile Solution Providers Currently following Vendors are providing mobile banking solutions as per required specifications. There may be several others also who might have appropriate solu- 16 Handbook On Mobile Banking

tions. Some of these Vendors may be in a position to be Application Service Providers. Banks should explore all available options to select the appropriate Vendor: a. Finacus b. Sarvatra Technology c. Infrasoft Technologies d. Financial Software and Systems (FSS) e. C-Edge Technologies f. FIS g. Saraswat Infotech h. Olive Crypto i. Infosys j. TCS k. Paymate l. GI Tech m. Euronet Handbook On Mobile Banking 17

I. PROJECT COST ESTIMATES The total cost of the mobile banking technology solution can be categorized into following 3 broad areas a) Acquisition or initial set up costs to acquire the solution, b) Commissioning costs to configure and connect the solution to banking systems and payment switches and gateways, and c) Operating costs involved in transacting and supporting day to day mobile banking transactions. There are two primary models for implementing a mobile banking solution at the bank: a. Ownership Model The entire solution is purchased, owned, hosted (either internally or through a 3rd party data center) and supported by the bank. The Setup cost may include customization cost, connectivity to CBS/MPS etc. Additional cost may include training, roll-out support, annual maintenance/technical support etc. b. ASP (pay per use)model In this model, the Vendor /ASP owns the mobile solution which is hosted either at its own Data Central or at a 3rd party Data Center. The bank does not incur any capital expenses and pays the ASP an annual fee and/or transaction fees depending on usage. The bank may have to, however, incur the initial set-up and connectivity costs. There may be a minimum threshold defined by the ASP for number of transactions or customers. There may also be vendors offering revenue model. The Setup cost may include customization cost, connectivity to CBS/MPS etc. Additional cost may include training, roll-out support, annual maintenance/technical support etc. Various cost components under different Cost Heads are explained herein below: 1. Acquisition Cost This is the cost incurred by the bank to acquire the mobile banking solution, whether owned by the bank or not. Following are its sub-components: a. Customization Charges Charges are for customizing the Solution to have features/functionality and a standard user interface (UI) as per individual bank s requirements. b. Channel Support Charges Some Vendors may not be supporting all technologies (SMS, IVR, USSD, WAP and Apps.), and therefore may charge a fee to induct such technology. c. Development of Additional Modules Usually, functionalities required by the bank are available in the Solution. In case there are unique requirements, the vendor may charge additional fees to develop these additional functionalities. The fees is based on actual time and effort to be expended by the vendor. d. BC Outlet/POS/Mobile Devices In case the bank opts for BC outlets or provides PoS or Mobile Devices to Agents, these costs would be additional. 2. Commissioning Costs One-time cost to cover configuration and connectivity to other systems such as CBS, IMPS etc. It also includes the installation of the solution and associated training to the bank staff. 3. Operating Costs The fees charged by the ASP (pay-per-use) model - per customer or transaction. The fee may involve a fixed cost and a variable cost (such as telecom charges). Some vendors may also have an annual fee in-addition to a per-transaction fee. 4. Other Costs: It includes the following items: a. Lock-in Period Along with the fixed fees or minimum guarantees, vendors may also stipulate a lock-in period i.e. the contract for a minimum number of years, or hold the rates valid for a specified period. b. Commissions and Revenue Share Some vendors also stipulate sharing of a portion of commission revenues for remittance/money transfer/mer- 18 Handbook On Mobile Banking

chant transactions. Some vendors do not have a revenue sharing arrangement at all, and let the bank decide the quantum of commissions to charge/receive. c. Support Fees Some vendors charge fee to provide technical support, business transaction support, reversals, reconciliation and other end of period processing support. Generally, the vendors bundle these charges into the transaction charges. d. Telecom Fees The telecom charges may be based on each transaction or may be on actual basis. Some vendors bundle this with the transaction charges. Additionally, the leased line charges for connectivity between the CBS and the mobile banking solution are payable by the bank. Total Cost of Ownership (TCO) The total cost of ownership (over an appropriate number of years, say 3 years or 5 years) of the solution based on various cost components explained above needs to be arrived at to undertake comparative analysis of various solutions. Following factors may impact total cost of ownership of each solution: 1. Estimated volumes 2. Minimum guarantees 3. Revenue sharing 4. Vendor s capabilities in respect of connectivity to external systems like CBS, IMPS etc. Handbook On Mobile Banking 19

J. OPERATING PLAN a. Training & Support A well-defined training plan for all bank staff involved covering topics such as product, technology, architecture, transaction process, channels, reconciliation, settlement etc. is required to be provided to the bank personnel who are involved in day to day operations and support of the mobile banking solution. b. Process User manuals, operating process, standard operating procedures, reconciliation and settlement etc., are required to be defined and documented. The solution provider needs to provide detailed document depicting architecture, technical specifications and configuration etc. for various modules. c. Support 24 X 7 technical support for the software technology implementation are to be provided by the solution provider. The support mechanism should be well defined and documented with clear turn-around time lines. d. Settlement A well-defined settlement process and mechanism for reversals and charge backs between the various stakeholders such as BC, agents and interbank transactions should be in place. The settlement cycle (end of day, weekly, monthly) should also be well defined and documented. e. Marketing & Customer Awareness The bank may have to design a plan for creating customer awareness and demand for the service through its branch network and campaigns. 20 Handbook On Mobile Banking

K. ROADMAP FOR IMPLEMENTATION 1. Seek internal approval from the Board for Mobile Banking Facility to its customers, specifying the type of arrangement 2. Secure IMPS membership for Inward Remittances (as Beneficiary) for which there is no need for RBI approval for RRBs/DCCBs and for installation of any Mobile Banking Solution 3. Select appropriate Mobile Banking Solution 4. Tie-up with Mobile Banking Solution Provider on either ownership basis or on ASP Model 5. Obtain Mobile Banking approval from RBI 6. Have the Mobile Application customized for their bank 7. Arrange linking of the CBS with the Mobile Banking Switch as explained earlier) or through sponsorship from a bank having membership of IMPS, complying with the sponsoring bank s requirements like opening of current account, maintaining balance etc. 9. Apply to NPCI for membership of IMPS 10. Get the Mobile Numbers of their customers linked to their respective account for the purpose of providing Mobile Banking Services 11. Lay down operational guidelines including customer support services 12. Complete end-to-end testing of the solution and Pilot launch with select account holders 13. Have the CISA Audit done for the entire setup 14. Release to account holders upon successful Pilot launch 8. Seek Membership of IMPS either Direct (if eligible Handbook On Mobile Banking 21

Annexure I - Mobile Banking Transaction Process Flow under different types of Models Mobile Banking Process Flow Ownership Model Bank A Telecom Operator s Switch Bank A Bank B IMPS CBS of Bank A CBS of Bank B Mobile Banking in DCCBs BC Model Customer Customer Customer BC Network Other Bank Switches BC Agent BC Agent MNO Gateway NPCI NFS Mobile Banking Platform ASP Bank Switch / ASP / Sponsor Bank Switch Bank CBS Merchant Gateway (Non-Banking) 22 Handbook On Mobile Banking

NUUP Based Mobile Banking Process Flow Bank A Telecom NUUP Bank A CBS Bank A Bank B CBS BAnk B IMPS Handbook On Mobile Banking 23

Annexure II - List of Non-Banking Entities authorized by RBI for Pre Paid Payment Instruments (Source: RBI Notification dated August 4, 2014 regarding Certificates of Authorization issued by the Reserve Bank of India under the Payment and Settlement systems Act, 2007 for Setting up and Operating Payment System in India) Pre-paid Payment Instruments 1 Airtel M Commerce Services Ltd. The Chief Executive Officer; Airtel M Commerce Services Ltd. Airtel Center, Plot No. 16, 6th Floor, Udyog Vihar, Phase -4, Gurgaon Haryana 122001. instruments known as Stored Value Card Wallet (SCW) 30.06.2010 (Valid upto 29.06.2015) 2 Atom Technologies Limited The Chief Executive Officer; Atom Technologies Limited, 4th Floor FT Towers, CTS 256 & 257, Suren Road, Chakala, Andheri (E),Mumbai-400093. instruments 30.06.2010 (Valid upto 30.09.2014) 3 Citrus Payment Solutions Pvt. Ltd. The Chief Executive Officer, Citrus Payment solutions Pvt. Ltd., 302, Swati Building, North Avenue Road, Off Linking Road, Santa Cruz West, Mumbai 400 054 instruments known as Citrus Virtual Wallet 18.10.2013 (Valid upto 18.10.2018) 4 DigitSecure India Private Limited The Chief Executive Officer, DigitSecure India Private Limited, Plot No: 1303 and 1304, 4th Floor, Khanamet, Hitech City, Ayappa Society, Madhapur, Hyderabad - 500 081. instruments known as HotRemit 23.07.2012 (Valid upto 22.01.2015) 5 Edenred (India) Private Limited nee Accor Services Pvt. Ltd. The Managing Director & Chief Executive Officer, Edenred (India) Private Ltd; Camera House, Majiwade Village Road Majiwade, Thane (W) 400 601. Meal vouchers and gift vouchers in the form of paper vouchers 29.10.2009 (Valid upto 31.10.2014) 6 GI Technology Private Limited The Director, GI Technology Private Limited, C-9, Thiru-Vi-Ka Industrial Estate- Guindy, Chennai 600 032 instruments known as I Cash Card (ICC) 29.10.2009 (Valid upto 31.10.2018) 7 Idea Mobile Commerce Services Ltd. The Chief Executive officer, Idea Mobile Commerce Services Ltd., 5th Floor, Windsor, Off C.S.T. Road, Kalina, Santacruz (East), Mumbai 400 098 instruments 25.11.2013 (Valid upto 24.11.2018) 8 India Transact Services Limited, The Chief Executive Officer, India Transact Services Limited, ITSL, 14th Floor, Tower 3, Indiabulls Finance Center, S. B. Marg Elphinstone Road (W) Mumbai 400 013 instruments 30.05.2014 (Valid upto 31.05.2019) 9 Itz Cash Card Ltd. The Chief Executive Officer, Itz Cash Card Limited, Top 14th floor, Times Tower, Kamala City, Senapati Bapat Marg, Lower Parel, Mumbai 400 013 instruments 25.08.2009 (Valid upto 24.08.2015) 10 MMP Mobi Wallet Payment Systems Limited The Chief Executive Officer, MMP Mobi Wallet Payment Systems Ltd.; A, E& F Blocks Voltas Premises, T B Kadam Marg, Chinchpokli, Mumbai 400 033 instruments known as mrupee 30.12.2011 (Valid upto 31.12.2015) 11 Mobile Commerce Solutions Limited The Chief Executive Officer, Mobile Commerce Solutions Limited, Peninsula Corporate Park, Ganpat Rao Kadam Marg, Lower Parel, Mumbai 400 013 instruments 08.11.2012 (Valid upto 07.11.2014) 12 Mpurse Services Pvt. Ltd. The Chief Executive Officer, Plot No 38, Sector 32 Institutional Area, Opposite Medanta Medicity Hospital, Gurgaon 122 001 instruments 30.06.2014 (Valid upto 30.06.2019) 13 Muthoot Vehicle & Asset Finance Ltd. The Managing Director, Muthoot Vehicle & Asset Finance Ltd. 1st Floor, Cochin Dental Clinic Bldg. Market Road, Towards Kombara, Kochi 682 014 instruments only 29.10.2009 (Valid upto 31.12.2018) 14 My Mobile Payments Limited The Chief Executive Officer, My Mobile Payments Limited, 7th Floor, MET Complex, Opp. Lilavati Hospital, Bandra West, Mumbai 400 050 instruments known as Money-on-Mobile 24.10.2011 (Valid upto 31.10.2018) 24 Handbook On Mobile Banking

Pre-paid Payment Instruments 15 One97 Communications Ltd. The Chief Executive Officer, One97 Communications Ltd., B- 121, Sector 5, Noida, 201 301 Uttar Pradesh Mobile based Pre-paid payment instruments (M- Wallet) 07.08.2013 (Valid upto 06.08.2018) 16 One Mobikwik Systems Private Limited The Chief Executive Officer, One Mobikwik Systems Pvt. Limited, 758, 1st Floor, Udyog Vihar, Phase - V, Gurgaon-122 016 Haryana Prepaid Payment Instruments known as Mobikwik Wallet 18.07.2013 (Valid upto 17.07.2018) 17 Oxigen Services (India) Pvt. Ltd. The Group President, Oxigen Services (India) Pvt. Ltd.; 257, Udyog Vihar, Phase-1, Gurgaon 122 016 Haryana. instruments known as Oxigen Wallets 18.01.2010 (Valid upto 31.12.2018) 18 PayMate India Pvt. Limited The Managing Director and CEO PayMate India Pvt. Limited, 111, 1st Floor, A- Wing, Sundervilla, SV Road, Santacruz (W), Mumbai 400 054 instruments known as Paymate Wallet 28.04.2010 (Valid upto 30.04.2016) 19 Pay Point India Network Private Limited The Chief Executive Officer, Pay Point India Network Private Limited, 2nd floor, Sushil Building, Kamala Nehru Compound, Cross Road No. 1, Kandivali (W) Mumbai 400 067 instruments known as Pay Pointz 03.04.2012 (Valid upto 02.10.2014) 20 Pyro Telecommunications Ltd. The Chief Executive Officer, Pyro Telecommunications Ltd., 8-2-293/82, Plot No. 264/A-31, Road # 92, Jubilee Hills, Hyderabad-500033 Andhra Pradesh instruments 30.01.2014 (Valid upto 31.03.2019) 21 QwikCilver Solutions Pvt. Ltd. The Chief Executive Officer, QwikCilver Solutions Pvt. Ltd., #104, 1st Main, Vijay Jatti Building, 3rd Floor, 5th Block, Kormangla Industrial Estate, Bangalore 560095. instruments 06.08.2013 22 Reliance Payment Solution Limited The Chief Executive Officer, Reliance Payment Solution Limited, 5th Floor, Court House, Lokmanya Tilak Marg, Dhobi Talao, Mumbai 400 002 instruments known as Jio Money 18.09.2013 (Valid upto 17.09.2018) 23 Smart Payment Solutions Pvt. Ltd. The Chief Executive Officer, Smart Payment Solutions Pvt. Ltd. 6/35, WEA Karol Bagh, New Delhi 110 005. instruments known as PayCash 30.06.2010 (Valid upto 31.12.2018) 24 Sodexo SVC India Pvt. Ltd The Chief Executive Officer, Sodexo SVC India Pvt. Ltd., Nesco Complex, Gate No. 3, Indabrator Building, Western Express Highway Goregaon (East); Mumbai 400063. 25 Tech Mahindra Limited The Chief Executive Officer, Tech Mahindra Limited, A- 20, Sector 60, Noida 201 301 Meal vouchers and gift vouchers in the form of paper based vouchers and Smartcard or Smart Meal Card instruments (m-wallet) known as MoboMoney 25.08.2009 19.09.2013 (Valid upto 18.09.2018) 26 Transaction Analysts (India) Private Ltd. The Chief Executive Officer, Transaction Analysts (India) Private Limited, 59, 3rd Cross, 17th Main, BTM Layout, Bangalore 560 068 instruments 07.03.2014 (Valid upto 31.03.2019) 27 UAE Exchange & Financial Services Ltd. The Country Head- India, UAE Exchange & Financial Services Ltd., Third Floor, Airline Building Opp. Maharaja college Ground, M G Road, Kochi 682 011. instruments known as Silver Card and Gold Card 29.10.2009 (Valid upto 31.10.2014) 28 UTI Infrastructure Technology and Services Ltd. The Chief Executive Officer, UTI Tower, Plot No. 3, Sector 11, CBD Belapur, Navi Mumbai-400 614 instruments known as National Common Mobility Card (NCMC) 21.03.2014 (Valid upto 31.03.2019) 29 Y-Cash Software Solutions Private Limited The Chief Executive Officer, Y-Cash Software Solutions Private Limited, VGR Essor, 3rd Floor, No 1140, 17th Cross, 7th Sector, H.S.R. Layout, Bangalore 560 102 Karnataka instruments known as Y-PayCash 15.03.2012 (Valid upto 14.03.2016) 30 ZipCash Card Services Pvt. Ltd. The Director, ZipCash Card Services Pvt. Ltd., 25E/4 Model Town, Bal Rajeshwar Road, Mulund (West) Mumbai 400 080 instruments known as ZipCash Coupons 29.10.2009 (Valid upto 31.10.2018) Handbook On Mobile Banking 25

Annexure III - List of IMPS Members Source: NPCI Website as on September 16, 2014 S. No. Bank Name No. of MMID issued (in lakhs) Using MMID (P2P) IMPS Remittance Using Account No. & IFS Code (P2A) Active Channels IMPS Merchant Payment National Unified USSD Platform (NUUP) 1 Allahabad Bank 0.21 Mobile 2 Andhra Bank 9.44 Mobile/ ATM 3 Axis Bank 90.51 Mobile/Internet 4 Bank of Baroda 2.34 Mobile/Internet 5 Bank of India 11.25 Mobile 6 Bank of Maharashtra 0.04 Mobile 7 Bassein Catholic Coop Bank 0.03 Mobile/Internet 8 BNP Paribas 0* Mobile 9 Canara Bank 4.89 Mobile/ATM/Internet 10 Catholic Syrian Bank 0.10 Mobile 11 Central Bank of India 0.13 Mobile/Internet 12 Citibank 3.09 Mobile/Internet 13 Corporation Bank 12.52 Mobile/Internet 14 Cosmos Co-operative Bank 0.08 Mobile 15 Dena Bank 0* Mobile 16 Development Bank of Singapore 17 Development Credit Bank 0* Mobile 0.59 Mobile 18 Dhanalakshmi Bank 6.26 Mobile 19 Dombivli Nagarik Sahakari Bank 20 Gopinath Patil Parsik Janata Sahakari Bank 0.24 Mobile 0* Mobile 21 Federal Bank 0.92 Mobile/ Internet 22 HDFC Bank 4.36 Mobile/ Internet 23 HSBC 0* Mobile/Internet 24 ICICI Bank 204.15 Mobile/Internet 25 IDBI Bank 0.06 Mobile 26 Indian Bank 44.98 Mobile/ Internet 26 Handbook On Mobile Banking

S. No. Bank Name No. of MMID issued (in lakhs) Using MMID (P2P) IMPS Remittance Using Account No. & IFS Code (P2A) Active Channels IMPS Merchant Payment National Unified USSD Platform (NUUP) 27 Indian Overseas Bank 7.66 Mobile 28 Indusind Bank 0.61 Mobile/ATM/Internet 29 ING Vysya Bank 0.08 Mobile/Internet 30 Jammu & Kashmir Bank 31 Janise Sahakari Bank 32 Janata Sahakari Bank, Pane 33 Kallappanna AwadeIchalkaranji Janata Sahakari Bank 0* Mobile 0* Mobile 0.03 Mobile 0* Mobile 34 Karnataka Bank 29.81 Mobile 35 Karur Vysya Bank 0.29 Mobile/ Internet 36 Kotak Mahindra Bank 33.90 Mobile/ Internet 37 Lakshmi Vilas Bank 6.89 Mobile/ ATM 38 Mehsana Urban Cooperative Bank 0.01 Mobile 39 Nainital Bank 0* Mobile 40 NKGSB Co-operative Bank 41 Oriental Bank of Commerce 42 Punjab and Maharashtra Co-op Bank 43 Punjab and Sind Bank 44 Punjab National Bank 0.05 Mobile 19.55 Mobile 0.47 Mobile 0.06 Mobile 3.99 Mobile/ATM/Internet 45 Ratnakar Bank 0* Internet 46 Saraswat Bank 0.18 Mobile 47 South Indian Bank 3.22 Mobile 48 Standard Chartered Bank 49 State Bank of Bikaner and Jaipur 50 State Bank of Hyderabad 0* Mobile 0.22 Mobile 0.32 Mobile 51 State Bank of India 64.29 Mobile/Internet Handbook On Mobile Banking 27

S. No. Bank Name No. of MMID issued (in lakhs) Using MMID (P2P) IMPS Remittance Using Account No. & IFS Code (P2A) Active Channels IMPS Merchant Payment National Unified USSD Platform (NUUP) 52 State Bank of Mysore 0.04 Mobile 53 State Bank of Patiala 0.08 Mobile 54 State Bank of Travancore 0.19 Mobile 55 Syndicate Bank 0.41 Mobile 56 Tamilnad Mercantile Bank 57 Thane Janata Sahakari Bank 58 The A.P Mahesh Urban Co-op Bank 59 The Greater Bombay Co-op Bank 0.20 Mobile 1.83 Mobile 0.02 Mobile 0.54 Mobile 60 UCO Bank 0.56 Mobile/Internet 61 Union Bank Of India 17.02 Mobile/ATM/Internet 62 United Bank Of India 0.39 Mobile 63 Vijaya Bank 0.42 Mobile 64 Yes Bank Ltd 9.67 Mobile/ Internet Sr. No. RRB/DCB/UCB No. of MMID issued (in lakhs) Using MMID(P2P) IMPS Remittance Using Account Active Channels No. & IFS Code(P2A) IMPS Merchant Payment National Unified USSD Platform (NUUP) 1 Pandharpur Merchant Co-operative Bank 0* Not applicable (#) 2 Kashi Gomti Samyut Grameen Bank 0* Not applicable (#) 3 Gayatri Co-operative Urban Bank 0* Mobile 4 Maharashtra Grameen Bank 0* Not applicable (#) # As beneficiary 0* No. of MMID issued lesser than 1000. 28 Handbook On Mobile Banking

IMPS Remittance Sr. No. Prepaid Payments Instrument Issuer (PPI) No of Subscribed Users (in lakhs) Using MMID(P2P) Using Account No. & IFS Code(P2A) Active Channels MPS Merchant Payment National Unified USSD Platform (NUUP) 1 Airtel Mcommerce Services Mobile (Dial*400#) 2 GI Technology 11.86 Mobile/ Internet 3 ITZ Cash Card 1.81 Mobile/Internet 4 MMP Mobi Wallet Payment Systems Ltd. (mrupee) 5 Mobile Commerce Solutions (M-Pesa) Internet Mobile (Dial*400#) 6 Muthoot Vehicle and Asset Finance Ltd Internet 7 Oxigen Services 18.12 Mobile/ Internet 8 U E Exchange and Financial Services 1.31 Mobile/Internet Handbook On Mobile Banking 29

Annexure IV - STK Application on Operator SIM This application can be embedded on operator SIM and can be distributed to customers by the MNOs. Keys necessary for encryption are stored in the SIM. Transmission of data can be either SMS or GPRS (data) channel. STK application on operator SIM can be used by any customer, irrespective of handset. The STK application can be standard menu-driven, interactive and user-friendly. This technology is not yet in use in India. The technology has following advantages: Supports all standard phones and SIMs Secure SMS and data communication channels usage Customers, merchants, BC agents of any bank can transact through this interface. Following challenges need to be addressed to adopt this technology: For the existing SIMs, the MNO needs to support the dynamic STK so that the application can be downloaded over the air (OTA) which is technically feasible but may be difficult for the older version of the SIM s. The SIM cards (particularly the older ones) need to have required space to store this application. 30 Handbook On Mobile Banking

ABBREVIATIONS AML BC ASP CBS CDMA GPRS GSM Hosted Solution IDS IMPS IRDA ISO IVR KYC MMID MNO mpin MPFI M-Wallet NEFT NFC NPCI NUUP OTP PCI-DSS PIN PPI RFID RTGS SIM SMS TRAI USSD WAP Anti-Money Laundering Business Correspondent Application Service Provider CORE Banking Solution Code Division Multiple Access General Packet Radio Service Global System for Mobile Software as a Service (SaaS) solution Intruder Detection System Immediate Payment System Infrared Data Association International Standards Organization Interactive voice response (IVR) is a technology that allows a computer to interact with humans through the use of voice and DTMF tones input via keypad Know Your Customer Mobile Money Identification Number (MMID) Mobile Network Operator Mobile Personal Identification Number Mobile Payment Forum of India Mobile Wallet National Electronic Funds Transfer Near Field communication National Payment Corporation of India Ltd. National Unified USSD Platform One Time Password Payment Card Industry Data Security Standard Personal Identification Number Pre-Paid Payment Instrument Radio Frequency Identification Real Time Gross Settlement Subscriber Identity Module Short Messaging Service Telecom Regulatory Authority of India Unstructured Supplementary Service Data Wireless Application Protocol Handbook On Mobile Banking 31

32 Handbook On Mobile Banking

Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH GIZ NABARD Rural Financial Institutions Programme A-2/18, 4th Floor, Safdarjung Enclave, New Delhi 110 029 INDIA Phone: +91-11-4949 5353 Telefax: +91-11-4949 5393 Email: detlev.holloh@giz.de