Senate Committee Raises Serious Concerns Over High SMS Charges by Banks in Pakistan

The Senate Standing Committee on Finance has raised serious concerns over high SMS charges by banks in Pakistan. During a recent meeting chaired by Saleem Mandviwalla, lawmakers highlighted that customers are now being charged as much as Rs3.40 per message, a sharp increase from just 42 paisas in 2021.

The issue has sparked widespread concern, as these SMS alerts are not optional but a mandatory service used to inform customers about their transactions. Many consumers have complained that the charges are too high, especially when compared to the actual cost of sending a text message.

Senate Committee Raises Serious Concerns Over High SMS Charges by Banks in Pakistan

Officials from the Pakistan Banks Association (PBA) defended the banks, stating that the main reason behind the high charges is the cost imposed by telecom companies. PBA Chairman Zafar Masud explained that banks have to bear both banking and telecom-related expenses. According to him, despite collecting fees from customers, banks are still unable to fully recover their costs.

The committee was informed that banks collectively earned around Rs18.7 billion from SMS alert charges. However, they reportedly paid Rs25.6 billion to telecom operators for these services. This means the banking sector is facing a net loss of approximately Rs6.9 billion each year on SMS alerts. It was also revealed that telecom companies are charging banks nearly five times higher than standard retail SMS rates.

Deputy Governor of the State Bank, Inayat Hussain, pointed out that banks are required by regulation to send transaction alerts to customers. He also mentioned that customers have access to free alternatives, such as mobile app notifications, which can reduce reliance on SMS services.

Despite these explanations, lawmakers were not satisfied. Members of the committee argued that the burden should not fall on customers, especially when the service is compulsory. Senator Anusha Rahman strongly criticized the pricing, questioning why messages that may cost only a few paisas are being charged at several rupees. She described the pricing system as excessive and unfair.

Further details presented in the meeting showed that an average banking customer receives about three SMS alerts per day. This adds up to nearly Rs300 per month, although some customers are reportedly being charged closer to Rs400. For many people, this has become an additional financial burden.

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Telecom representatives defended their pricing by pointing to costs related to security, infrastructure, and service delivery. However, their arguments did not fully convince the committee members, who maintained that the pricing needs to be reviewed.

At the end of the session, the committee directed both banks and telecom companies to submit detailed records of their SMS-related costs, charges, and revenues for the past year. Chairman Mandviwalla made it clear that the matter would be thoroughly investigated and that steps would be taken to address overbilling.

The issue highlights a growing concern about transparency and fairness in banking services. As digital banking continues to expand, ensuring reasonable charges for essential services like transaction alerts will remain an important priority for both regulators and consumers.