Transaction alerts

A transaction alert is the SMS or email your bank sends the moment money moves in or out of your account. It is not a courtesy. It is the first line of defence against fraud.

The workbook gives two related facts about it. First, from its list of card-safety tips: register with your bank for SMS alerts on transactions, though banks may charge you for providing SMS or e-mail alerts on your account. Second, from its section on customer liability: RBI has emphasised that banks need to send SMS and e-mail alerts immediately after every transaction, and these messages must let you reply directly, so you can report fraud at once.

So one fact describes a service you sign up for; the other describes a duty RBI places on every bank, regardless.

Two separate rules sit inside "transaction alerts", and the workbook keeps them distinct:

1. Registering for SMS alerts is something the workbook lists as a good practice under ATM card safety — register with the bank, so you receive alerts on your transactions. It adds that banks may charge customers for providing this SMS or e-mail service.
2. Sending an alert after every transaction is a duty RBI places on banks directly: banks must send SMS and e-mail alerts immediately after a transaction is carried out, and the messages must be built to carry the customer's reply too, so fraud can be reported right away.

The two facts connect at the point that matters most for a claim. A customer facing an unauthorised transaction has no liability, provided they notify the bank within three days of receiving an alert from the bank — so the alert is not just a convenience, it is the clock that starts the protection running.

The exact charge, if any, is illustrative — the workbook does not print a figure for it.

Anand registers for SMS alerts when he opens his savings account. His bank charges him a small annual fee for the service, exactly the possibility the workbook flags.

Six months later, an unauthorised transaction of Rs 22,000 hits his account. Because he is registered, he receives an SMS the same minute it happens. He replies to that very SMS, as the alert is built to allow, and separately calls his bank the next morning — well within the three-day window the RBI liability rule sets.

Because the fraud was through no fault of his own and he reported it inside the window, Anand bears no liability for the Rs 22,000. Had his bank failed to send any alert at all — a failure of RBI's own mandatory rule — he would have had no way to start that three-day clock in the first place.

Chapter 4 (Savings Related Products), Section G, lists registering for SMS alerts among its ATM safety tips, noting the possible charge; Section H repeats RBI's requirement that banks send SMS and e-mail alerts immediately after every transaction, reply-enabled for reporting fraud. Expect a question distinguishing the optional, possibly chargeable SMS-alert registration from the mandatory RBI requirement that banks send an alert after every transaction.

• Registering for SMS alerts may carry a bank charge; the duty to actually send an alert after a transaction does not depend on that registration — it is a separate RBI mandate on the bank.
• The alert must let you reply directly, so a fraud report can go back through the same message — this is a stated RBI requirement, not an optional feature.
• The alert is what starts the three-day clock in the customer liability rule for the "nobody's fault" scenario — without an alert, a customer cannot be expected to know a transaction happened.
• Do not confuse a bank's SMS transaction alert with the monthly SMS and e-mail statement of funds and securities balances that a stock exchange sends about a trading account — the two are different products in different chapters, one from your bank, one from your broker's exchange.