Cost of free alerts: RBI’s SMS order may dent banks’ income by Rs 300 crore

The Reserve Bank of India issued directions on June 24 barring banks from charging customers for SMS transaction alerts, which previously fetched Rs 15-18 per quarter in fees. A large bank with 50 million fee-paying customers could forgo around Rs 360 crore in annual fee income, with the industry-wide dent estimated at Rs 300 crore. Top private lenders including HDFC Bank, ICICI Bank, Axis Bank, and Kotak Mahindra Bank are expected to absorb the cost and continue sending alerts, while the RBI has made SMS alerts for transactions below Rs 500 optional and recognised alternate channels such as push notifications and WhatsApp.