RBI Directs Banks to Stop Charging for Mandatory SMS Notifications
RBI Directs Banks to Stop Charging for Mandatory SMS Notifications
In a customer-friendly move, the Reserve Bank of India (RBI) has directed banks not to charge customers for SMS alerts related to regulatory compliance, customer awareness and promotional messages. The decision aims to ensure that important banking information reaches customers without any additional cost.
The revised guidelines, issued by the RBI on June 24, prohibit banks from recovering charges for these categories of SMS alerts. Earlier, several banks collected around ₹15 to ₹18 per quarter from customers towards SMS notification services.
The RBI has also encouraged banks to use digital communication channels such as Google RCS, WhatsApp, mobile banking app notifications and push alerts for customer communication. For transactions of ₹500 or less, banks are not required to send SMS alerts and may instead use these alternative digital platforms.
The move is expected to reduce fee income for banks, with industry estimates suggesting that some large lenders could lose up to ₹300 crore annually. However, the RBI believes the change will improve customer convenience while ensuring essential banking updates are delivered free of charge.
Experts say the decision will help customers save on unnecessary charges and accelerate the banking sector’s shift towards digital communication. Although banks may look for other ways to recover the revenue loss, no new charges have been announced so far.
India generates nearly 60 to 80 billion business SMS messages every month, and the RBI’s latest directive is expected to encourage greater adoption of app-based notifications and digital messaging services for banking communication.
