What changed
RBI reinforced that cooperative banks must charge SMS alerts based on actual usage, not flat rates, referencing earlier circulars from 2009 and 2011. Banks are now explicitly required to use available technology to implement this. An Annex outlines principles for reasonable service charges on basic banking services.
What it means for you
Cooperative banks can no longer levy uniform SMS alert charges; they must bill per actual alert sent. This ensures equity for customers who receive fewer alerts. Banks need to upgrade or integrate with telecom systems to track usage accurately. Non-compliance could invite regulatory scrutiny.
What you must do
- Audit current SMS alert charging model and shift to actual-usage billing immediately.
- Coordinate with telecom service providers to implement usage-based tracking and billing.
- Review and align all service charges for basic banking services with the principles in the Annex.
- Acknowledge receipt of this circular to your respective RBI Regional Office.
- Ensure online alerts for all card transactions, regardless of amount, are active as per earlier mandates.
Who it affects
State Cooperative Banks (StCBs), District Central Cooperative Banks (DCCBs), Customers of cooperative banks using card transactions, IT and operations teams at cooperative banks
Does this circular apply to all SMS alerts or only card transactions?
It applies to SMS alerts for all types of transactions involving card usage at various channels, as per earlier circulars. The actual-usage charging principle covers these alerts.
What if our bank cannot technically implement actual-usage billing immediately?
RBI expects banks to leverage available technology and work with telecom providers. A transition plan should be in place; delays may require explanation to the Regional Office.
Are there penalties for non-compliance?
The circular does not specify penalties, but non-adherence to RBI directives on customer service and reasonableness can lead to supervisory action or adverse remarks in inspections.