If you are an Indian with a bank account, now would be the right time to check if you are getting charges for ‘mandatory’ SMS alerts

If you are an Indian with a bank account, now would be the right time to check if you are getting charges for ‘mandatory’ SMS alerts

If you are an Indian with a bank account, now would be the right time to check if you are getting charges for ‘mandatory’ SMS alerts

Many Kotak Bank customers were greeted with a rather unpleasant text message on Friday, with the lender announcing a fee on SMS alerts.

According to Kotak Mahindra Bank, starting December 2025, a small fee of Rs 0.15 (15 paise) will be charged for each SMS alert sent for transactions on your savings or salary account, after the first 30 SMS alerts each month.

If you had two cutting chai at Rs 10 a day in a 30-day month, and paid the vendor via UPI, the SMS alerts will alone cost you an extra Rs 9—just one rupee shy of another class of hot piping tea.

The basic understanding from the lender's "public document" is that transactions like ATM withdrawals, UPI/NEFT/RTGS/IMPS transfers, cash deposits, and debit/credit card usage will trigger these SMS alerts.

However, if your account keeps a combined balance of Rs 10,000 or more (including monthly average, savings, and term deposits) or receives regular salary credits, these SMS alerts will remain free for you.

Some account types—like Private Banking, Kotak Easy Savings, Non Resident Accounts, and select institutional or government accounts—are excluded from these charges.

To put it simply, if you are someone who cannot afford to keep Rs 10,000 as average monthly balance (stated above), the lender will charge you more for something as basic and 'mandatory' as SMS alerts.

And it is not just one bank. All the major ones have SMS alert charges, and funnily enough, they also attract GST in some cases. Charging for a 'mandatory' service is something, but collecting tax on it from the customer is just rich.

Mandatory charges?

Back in 2017, the Reserve Bank of India (RBI) said that customers had to be mandatorily registered for SMS alerts. "Banks must ask their customers to mandatorily register for SMS alerts and, wherever available, register for e-mail alerts, for electronic banking transactions. The

SMS alerts shall mandatorily be sent to the customers, while email alerts may be sent, wherever registered," the apex bank stated in the July 6 2017 notification titled Customer Protection – Limiting Liability of Customers in Unauthorised Electronic Banking Transactions.

Now, customers—especially those who have monetary limitations—are being forced to shell out money as extraneous charges for something that is 'mandatory' for banking? In an ideal world, these should be borne by the banks themselves as operating costs.

And what is with the waiver of charges on HNI accounts—the ones who won't even feel the pitch.

Last month, an ET report stated that banks in India approached the RBI to exempt them from sending SMS alerts for transactions under Rs 100. It almost sounds like these financial institutions are blaming the rise of low-value payments due to the advent of the Unified Payments Interface (UPI)—the same system that gave them a huge bump in accounts with the Digital India initiative.

Yes, the Indian banking system now sees billions of transactions happening daily. But that is the cost of doing business. The one that goes between the topline and bottomline of the P&L statement as 'operating costs'.

And the lenders claim that the SMS waiver and the fees attached to these alerts are to reduce customers getting "overwhelmed" by them. Great logic, if other messaging platforms like WhatsApp did not exist for most people to use as their primary communication tool.

Some banks say that these SMS alerts can be opted out, but a quick look at almost every one of their banking websites and apps will reveal that such options, if they exist, are buried deep down in the caverns of the sitemap.

It is not about a mere Rs 9 for a month. It is about principle. The charges of running a business come with the territory. And banks make crores of rupees.

For context, Kotak Mahindra Bank alone made a profit after tax (PAT) of Rs 3,253 crore in the second quarter of fiscal FY 2025. Punishing those who are not able to keep Rs 10,000 AMB with SMS charges may not be the right branding move these banks should be exploring, for now.

The opinions expressed in this article are those of the author and do not purport to reflect the opinions or views of THE WEEK.

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