Digital transactions: Banks ask RBI to stop SMS alert mandate for transactions under Rs 100; here’s why
October 13, 2025
India Business News: Banks are seeking RBI approval to stop sending SMS alerts for transactions under Rs 100, citing alert fatigue from frequent small online payments. Pro
Banks are seeking RBI approval to stop sending SMS alerts for transactions under Rs 100, citing alert fatigue from frequent small online payments. Proposed safeguards include notifications for cumulative small transactions, with customer consent to be obtained before implementation.
Banks have approached RBI seeking green light for a minor change, to stop sending SMS alerts for transactions under Rs 100. They say the rise in small online payments, especially through UPI, has flooded customers with notifications, leading to alert fatigue. Sometimes, the customers even end up missing messages for bigger transactions, sources familiar with the matter told ET. "We made this representation last month after holding internal consultations with both public and private sector banks. The issue has been raised with the RBI and we have also submitted a safeguard list to prevent fraud," said a bank executive, who asked not to be named. Another banking official explained that the proposed safeguards would still notify customers if small transactions cross a certain amount or number. "Let the RBI take a call, and these adjustments can be made," they added, noting that customer consent would be taken before any changes are implemented. Currently, RBI rules require banks to register customers for SMS alerts on all electronic transactions, while email alerts are optional. SMS messages are automatically sent, whereas email alerts go only to those who opt in. "The customer will be given a choice to opt out of small-value transactions capped at Rs 100. If they want to receive alerts, they can still get them through notifications on banking apps or emails," said the second bank executive. Sending an SMS costs about Rs 0.20, according to ET, which is usually passed on to customers, though some banks cover the cost. Email alerts, on the other hand, are free. Banks have been advised to use technology efficiently and charge customers only for actual usage. Last year, a parliamentary panel pointed out a major issue with the financial transaction system, noting that customers do not always get SMS notifications when money is credited or debited from their accounts.
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Banks have approached RBI seeking green light for a minor change, to stop sending SMS alerts for transactions under Rs 100. They say the rise in small online payments, especially through UPI, has flooded customers with notifications, leading to alert fatigue. Sometimes, the customers even end up missing messages for bigger transactions, sources familiar with the matter told ET. "We made this representation last month after holding internal consultations with both public and private sector banks. The issue has been raised with the RBI and we have also submitted a safeguard list to prevent fraud," said a bank executive, who asked not to be named. Another banking official explained that the proposed safeguards would still notify customers if small transactions cross a certain amount or number. "Let the RBI take a call, and these adjustments can be made," they added, noting that customer consent would be taken before any changes are implemented. Currently, RBI rules require banks to register customers for SMS alerts on all electronic transactions, while email alerts are optional. SMS messages are automatically sent, whereas email alerts go only to those who opt in. "The customer will be given a choice to opt out of small-value transactions capped at Rs 100. If they want to receive alerts, they can still get them through notifications on banking apps or emails," said the second bank executive. Sending an SMS costs about Rs 0.20, according to ET, which is usually passed on to customers, though some banks cover the cost. Email alerts, on the other hand, are free. Banks have been advised to use technology efficiently and charge customers only for actual usage. Last year, a parliamentary panel pointed out a major issue with the financial transaction system, noting that customers do not always get SMS notifications when money is credited or debited from their accounts.
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