wordpress blog stats
Connect with us

Hi, what are you looking for?

Charge Customers For SMS Alerts On Usage Basis, RBI Tells Banks

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 particular amount as a fee, so banks are free to charge whatever they want. They will probably figure out their average cost of SMS services, add an additional charge to address their operational cost and potential changes in SMS charges, and set a fee.

Extract from Second Quarter Review of Monetary Policy 2013-14

Customer Service – Charges Levied by Banks for Sending SMS Alerts

37. With a view to ensuring reasonableness and equity in the charges levied by banks for sending SMS alerts to customers, banks are advised to leverage the technology available with them and the telecom service providers to ensure that such charges are levied on all customers on actual usage basis.

You May Also Like


While traditional lenders have historically ignored small businesses, merchants and some customer segments, payment players have banked on the swaths of data they have...


You’re reading it here first: After several months of deliberation, India’s leading crypto-currency exchanges have finalised a code of conduct policy to be followed...


The Delhi High Court on Monday stayed a penalty issued by the Finance Ministry’s Financial Intelligence Unit (FIU) against PayPal Payments Private Limited, the...


HDFC Bank is working on resolving its digital banking issues over the next 10-12 weeks and has submitted a plan of action to the...

MediaNama is the premier source of information and analysis on Technology Policy in India. More about MediaNama, and contact information, here.

© 2008-2018 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ

Subscribe to Daily Newsletter

    © 2008-2018 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ