SMS alerts for transactions below Rs100 to be waived off? Here's what we know so far

Banks in India have requested the Reserve Bank of India (RBI) to grant an exemption from sending SMS alerts for transactions below Rs 100. According to a report by the Economic Times, the move comes as lenders grapple with a growing number of low-value payments through digital platforms such as the Unified Payments Interface (UPI), which has significantly increased the number of alerts sent daily.

With crores of such transactions happening daily, banks argue that customers are being overwhelmed by alerts for every minor payment — from coffee purchases to parking fees — which may cause them to overlook crucial messages for higher-value or suspicious transactions.

Bank officials familiar with the discussions said that internal consultations had been held across both public and private sector lenders before the proposal was formally sent to the regulator. As part of the request, banks have also submitted a list of safeguards to prevent misuse and fraud if the waiver is approved. The proposed safeguards include setting thresholds on the number or value of small transactions beyond which alerts would still be triggered, the report added.

Customers may get an opt-out option

Under current RBI guidelines, banks must send SMS alerts for every transaction and also offer email notifications where available. If the waiver is approved, customers could be given a choice to opt out of SMS notifications for payments under Rs 100, while still receiving email or app-based alerts.

Bank officials said the proposed change aims to balance convenience with safety. “Customers who still want SMS alerts can continue receiving them,” another executive told ET. “But for those who make frequent small digital payments, this will reduce clutter.”

Cost and clarity for the customer

Sending an SMS currently costs banks around 20 paise per message, an expense often passed on to customers. With digital payments surging, this cost adds up significantly. Lenders believe the waiver would not only reduce operational costs but also improve the clarity of communication with customers.The RBI has not yet responded to the proposal. If accepted, the change could mark a small but meaningful shift in how India’s digital banking ecosystem manages customer communication — reducing noise while keeping security intact.