Banks seek waiver from SMS alert for transactions below ₹100: Report

Banks have requested the Reserve Bank of India (RBI) to waive the need to send SMS alerts for transactions below ₹100, The Economic Times reported on October 13.

With the growing use of Unified Payments Interface (UPI) in India, the number of low-value payments through digital platforms has increased rapidly in recent years. This has also caused a significant increase in the number of alerts sent every day.

Because of crores of small transactions, banks have approached the RBI, saying customers are being overwhelmed by the number of alerts received every day.

As people now use UPI for almost everything, even for things like milk and bread, too many transactions sometimes result in them missing important ones. This can be problematic in the case of high-value or suspicious transactions.

Internal consultations were held across both public and private sector banks before the proposal was sent, the ET report said, citing bank officials privy to the discussions.

Banks have also mentioned a list of safeguards with the request aimed at preventing misuse if the waiver is approved. The safeguards include thresholds on the number or value of small transactions after which alerts will be sent, regardless, the report said.

Sending SMS currently costs banks nearly 20 paisa per message, and this expense is often passed on to the customers through service charges. These costs can add up gradually, and banks believe that the waiver would reduce operational costs and improve the clarity of communication.

Can you opt out?

As per RBI guidelines, banks are required to send SMS alerts for every transaction and may also offer email notifications whenever available/applicable. If the waiver is approved, customers can choose whether or not they want to receive SMS alerts for transactions under ₹100, while still receiving email or app-based alerts, the report noted.

Bank officials said that the proposed change would be implemented with safety. Customers who still want to receive alerts can continue doing so, but for the ones who make frequent digital payments, this change can reduce clutter, a bank executive told ET.