New Delhi: Banks have approached the Reserve Bank of India (RBI) seeking an exemption from sending SMS alerts for transactions below Rs 100.
They argued that with the rapid rise in digital payments, especially through Unified Payments Interface (UPI), customers are receiving multiple alerts for very small transactions, which creates notification fatigue.
Concerns Over Notification Overload
According to banks, continuous alerts for minor transactions such as small UPI transfers or wallet top-ups clutter customer inboxes. This, they say, can cause users to overlook alerts for higher-value or potentially fraudulent transactions, defeating the core purpose of timely notifications.
Current RBI Mandate
Under existing RBI guidelines, banks are required to register customers for SMS alerts for all electronic transactions. Email alerts are also to be sent, but only to those who have opted in. SMS notifications are mandatory, making it compulsory for banks to push alerts even for low-value transactions.
Cost Burden and Customer Charges
Industry data shows that each SMS costs a bank around Rs 0.20. While some banks pass this cost on to customers, others absorb it as part of their service offering. Email alerts, on the other hand, come at no additional cost. Banks have suggested that technology and app-based notifications are now capable of delivering real-time updates at a lower cost compared to SMS.
Call for Policy Review
Banks have requested the regulator to review the mandate in light of evolving digital adoption. They believe a revised threshold or an opt-in model for low-value alerts could improve customer experience while reducing operational costs.
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