Banks Reluctant to Offer Free SMS Alert Service To Customers

Some of the commercial banks are not complying with the directives of the central bank to send free SMS alerts to the customers in order to keep them updated for all transactions from their accounts.

A few banks deducted charges from their customers a couple of weeks ago and few of them have not commenced the free SMS alert service for their customers so far, which is a prima facie violation of rules and regulations.

SBP, in its circular, explained its regulations as below

With effect from January 01, 2019, banks/MFBs are required to send free transaction alerts for every transaction performed using digital channels including but not limited to ATM, POS and internet banking etc. within and outside Pakistan.

Implementation of this clause would require provisioning of free of cost SMS and email alert services to all existing/future customers who subscribe to electronic/digital banking services including but not limited to ATM, POS and Internet banking transactions either locally or internationally. Banks/MFBs who have already charged fee from customers for such transaction alerts shall revert the same.

State Bank of Pakistan (SBP) issued orders to banks and branchless banking services to ensure a free SMS alert service for the customers after various incidents of illegal transactions were reported in the banking industry including hackers’ attacks and instances of money-laundering.

In recent times there have been issues where customers were not aware of transactions made from or into their accounts.

In one case, a number of customers were unaware about the transactions due to the hacking or fraudulent activities due to lack of SMS alerts. A majority of them found themselves in the lurch after they got to know their money was siphoned off.

In another case, customers have become millionaires or billionaires overnight because of transactions made into their bank accounts from unknown accounts. Unfortunately, the banks did not inform them through SMS alerts and investigative agencies approached them to ask them of their sources of income.

Free SMS Alerts Can Prevent Customers From Losses

The central bank came up with an easy and doable idea to make the SMS alert service free for every account holder. The central bank also set up a hotline for customers to immediately report any illegal transfer of money from their bank accounts.

Banks are reluctant in providing free SMS alert service to their customers even though they utilize accountholders’ money for their operations and businesses. They usually charge an amount of Rs. 50 to Rs. 100 from their customers for sending them updates of accounts transactions through SMS.

Bankers are of the view that the free service will cost the banks and that they are in the process of adding cell numbers of their customers in the system, which may take some more weeks.

SBP should come forward and take strict actions against the non-compliant banks and ensure the free SMS alerts services. In this way, the customers will be protected from any fraudulent or money-laundering activity.

  • Its False report that banks are not complying the instructions. I am a banker and have a very close eye at this issue. In Fact banks have found one bug / drawback in SBP instructions. They are sending free txn alerts of ATM / Digital txns only. Other transaction alerts are not received. For all type of alerts banks charge the SMS alerts fee.

  • It is the SBP’s fault that it is clinging to outdated technology like SMS. They should have told banks to send out emails

  • What’s the use of keeping money in banks?

    Best to avoid banks altogether because one has to pay fees, charges, taxes, etc to get access to own money when the bank is in fact using that deposited money and should be paying the depositor each month for using that money.

  • They have found a new idea to keep charging customers of SMS alert charges saying: “SMS alerts are free for digital transactions while branch transactions will be charged for the same rate (Rs. 100 per month).” And of course they are still charging the customers as previous with no intentions to pay back already charged amount since Jan-19.

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