The Reserve Bank of India has asked banks to charge customers for SMS alerts on a per usage basis for SMS alerts. As per previous RBI notifications, banks in India are mandated to SMS alerts to customers, informing them of transactions made, with the idea of this helping mitigate fraud. The RBI has now said that given the technology available with banks and telecom service providers, it should be possible for banks to charge customers on the basis of actual usage of SMS alerts, in order to ensure reasonableness and equity in the charges levied by banks for sending SMS alerts to customers. This change was announced as a part of the Second Quarter Review of Monetary Policy Statement 2013-14 announced on October 29, 2013. This is applicable to all Scheduled Commercial Banks, and Urban Commercial Banks for SMS alerts related to ATM usage. Banks usually end up paying VAS companies for pushing SMS alerts on a per-SMS basis, while at the same time, charging all customers a fixed amount: As NDTV Profit points out, the State Bank of India had introduced an annual fee of Rs 60 for SMS alerts, a move which was then emulated by other banks. As a result, customers were being charged a fixed amount, irrespective of their usage, which meant that heavy users of banking services were possibly being subsidised by those who barely use them. A shift to a per-use basis addresses that. How might banks approach this? The RBI hasn't fixed a…
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