Emerging M-Commerce (Mobile-Commerce) activity opened scope for the design of new protocols. Now a days SMS (Short Message Service) as a mobile payment channel is gaining prominence because it supports low end devices and low of cost. In this paper we proposed a novel protocol for SMS based mobile banking and payment framework with formal verification. The framework of A Secure SMS-based Mobile Banking Protocol with Formal Verification (SSMBP) involves authentication and payment. This model provides secure SMS communication between the customer and the bank through a mobile phone banking application. Further, its verified that the protocol for its correctness and security properties because most of the protocols lack of achieving them. Our proposed framework is experimentally validated by a formal method of model checking tool called Automated Validation of Internet Security Protocols and Applications (AVISPA) and Burrows Abadi and Needham logic (BAN). Security analyses shows that, the proposed mechanism works better, compared with existing SMS payment protocols for real-world applications.