What changed
RBI reiterated that UCBs must charge SMS alerts based on actual usage, not flat rates. This aligns with earlier 2007 guidelines on reasonable bank charges and 2009/2011 mandates for online alerts on card transactions. The circular references the Second Quarter Review of Monetary Policy 2013-14.
What it means for you
UCBs can no longer levy uniform SMS alert charges; they must bill per alert actually sent. This protects customers from paying for alerts they don't receive or use. Banks need to upgrade or use existing systems to track and bill accurately, potentially impacting fee income from SMS services.
What you must do
- Audit current SMS alert charging model and switch to actual-usage billing as advised.
- Coordinate with telecom providers to implement per-alert tracking and billing.
- Update customer terms and conditions to reflect actual-usage charges.
- Ensure compliance with earlier circulars on online alerts for card transactions.
- Communicate the change to customers and train staff on the new charging mechanism.
Who it affects
All Primary Urban Co-operative Banks (UCBs), Customers using ATM/debit cards and receiving SMS alerts, Bank IT and operations teams handling SMS alert systems
Does this circular apply to all SMS alerts or only card transactions?
The circular advises actual-usage charging for SMS alerts generally, referencing earlier mandates for online alerts on card transactions. The scope is SMS alerts sent by banks, but the primary context is card-related transactions.
Can UCBs still charge a flat monthly fee for SMS alerts?
No. The circular requires charges to be levied on actual usage basis, so flat fees are not permitted.
What if our bank cannot technically implement per-alert billing?
RBI expects banks to leverage available technology and work with telecom providers. If implementation is not feasible, banks should seek guidance from RBI or upgrade systems.