pic-1I suppose I am not to be exaggerating if somebody asks me “where is your bank?” And if I say “in my hand”. Really we can make a several banking operation with the help of mobile phone. In India, there are 400 million mobile populations & growing. Banking population is much less than this & there is tremendous scope for bank to utilize this mobile channel because most of the customers are comfortable with. Bankers are now shifting focus from cost reduction to branch less banking.


For branch less banking there are two elements. First is Debit/ATM/Smart Card & another is cell phone. Both are technology dependent. ATM or smart card technology is not at all brings down the banking cost, because it involves operation cost, but mobile banking is really a cashless & if our



MS-Mobile Station ISC-International Switching Centre

BTS-Base Transceiver Station EIR-Equipment Identity Register

BSC-Base Station Controller AUC-Authentication Centre

MSC-Mobile Switch Centre HLR-Home Location Registry

OMC-Operation and Management Centre VLR-Visitor Location Registry

SMSC-Short Message Service Centre

GSM Architecture


Involvement in mobile banking is more then really we will enter in to a cashless economy.

Mainly SMS, GPRS and USSD (Unstructured Supplementary service data), this three technologies are used for mobile banking.

SMS, often called text messaging, is widely accepted for mobile banking because all current mobile devices having a text messaging facility. GPRS, a general-packet-based-radio-service, is widely accepted because its faster data rate. It has become more widely available along with other 2.5G and 3G services. Java enabled handset is required fro GPRS. Banks offer this facility only in GSM mobile, not in CDMA mobile.


Protocol Overview


What Mobile Banking Facilities Bank offered to the customers?

Banking Services

  1. Check balances in the customers current account & savings account,
  2. Check balances in the customers fixed deposit account,
  3. Check & view last 10 transactions in the customers account,
  4. Request for a/c statement for a selected period through E-mail,
  5. Customers can pay bills for registered billers through banks Bill Pay system,
  6. Customers can transfer funds from their account to any other third party account. This system varies from bank to bank,
  7. Customer can request to issue a new cheque book,
  8. Customer can check the status of his issued cheque,

Investment Services

  1. Check investment account holding value,
  2. Investment in mutual fund,
  3. Redeem the investment,
  4. Last 5 NAV of mutual fund

Addl. Customer can change his net banking password. It is advisable to change the password in regular interval.

Who can access & view mobile banking?

Individual Account

Account Type



Sole Ownership Account


Yes-Access & Transact

Joint Account-Single Operation


Yes-Access & Transact

Joint Account-Joint Operation



Minor Account-Minor



Minor Account-Guardian


Yes-Access & Transact

Minor Account-Power of Attorney


Yes-Access & Transact

Non-Individual Account

Account Type



Authorized Signatories-Single Operating


Yes-Access & Transact

Authorized Signatories-Conditional Operating



How SMS Mobile Banking Works



  1. To avail this facility it is essential to register mobile number with the bank
  2. You must be a subscriber of cellular service provider with whom bank has a tie up with SMS facility,
  3. SMS banking covers most of the basic banking enquiry like, balance enquiry, cheque status, mini statement, cheque book request & others,
  4. Individual can access only his account.
  5. Transaction is executed when a customer send a command keyword, to the bank, using a short code, a five or six digit number. If a/c holder send ‘BAL’ a/c holder will get a quick response with their a/c balance.

How GPRS enabled mobile banking works


  1. Need a GPRS enable mobile handset & a advanced GPRS subscription from mobile service provider, and also minimum 80 kbps GPRS bandwidth required,
  2. The handset must be Java enabled having MIDP 2.0 and CLDC 1.0 compliant & having a greater than 100kb JAR Memory,
  3. With the help of GPRS menu of service provider download the application provided by the bank and install it,
  4. After installation application icon will be appear in the menu,
  5. Start the application with user ID or nick name & net banking password. After successful login activation key is generated. You have to register this key with the help of bank’s customer care service. After successful registration you will access your account using bank’s mobile banking facility from your mobile phone.


Note: Activation key is required to register every time if you change your mobile phone or reinstall the application software.


How USSD enabled mobile banking works

USSD means Unstructured Supplementary Service Data. This system is only available on GSM networks. Various mobile banking process i.e. balance enquiry, money transfer, bill payment, and top up can be performed through this communication protocol. It is similar to SMS technology only that its data payload limits between 160-182 alphanumeric characters in a single transmission. However this technology has some advantage over than SMS technology


  1. Message delivery is guaranteed
  2. This protocol allows for session based communication between the server & the mobile handset,
  3. USSD application may be performed using a wide variety of mobile application platforms like, WAP,J2ME,SIM Toolkit, CAMAL or using USSD command,
  4. USSD is more secure than standard SMS,
  5. Invoke commands by entering  command codes, no need to install an application into the handset or no need to open a messaging application,
  6. USSD does not cost the end users,


Mobile banking is very attractive due to his convenient approach to perform remote banking, but however, the safety issue is still a concern for several customers. Banks are assuring the customers that the mobile banking is safe just like an iron locker because the transaction work on a four-digit mobile banking PIN. Incorrect pin entries lock the application.

The mobile banking uses secured HTTPS protocol for communication between the mobile client and the mobile server. Secure Hyper Text Transfer Protocol (HTTPS) uses HTTP, but, additionally activates Web server security, in the form of Secure Sockets Layer (SSL), So that the communications between the client and the (host) Web server are encrypted.





As long as technology is save mobile banking is also a save. Globally m-commerce is growing very fast. Every bank is trying to give customer a better opportunity. Advance technologies simplified our life. We can do more out of the bank.

Ref. video: how Barclays Mobile banking works

Ref. Kotak Mahindra Bank, Barclays India, Indian Overseas Bank



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