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The Telecom Regulatory Authority of India (Trai) on Friday issued a list of defaulters including State Bank of India, HDFC Bank Ltd, Kotak Mahindra Bank Ltd and Life Insurance Corporation of India that have not adopted the new SMS regulations rolled out to check spam messages and prevent online frauds.

The regulator asked operators to fully implement the new SMS rules from 1 April, directing them to block messages from companies and telemarketers that are yet to comply with the norms. All entities have been directed to adopt the rules by 31 March to avoid disruptions in online transactions.

Trai urged all regulatory bodies including Reserve Bank of India, Securities and Exchange Board of India, Insurance Regulatory Development Authority, and state and central government departments to ensure implementation of the regulations by entities under their jurisdiction.

“It has been informed that principle entities including major banks like State Bank of India, HDFC Bank, Punjab National Bank, Axis Bank Ltd are not transmitting mandatory parameter like content template IDs, PE (principle entity) IDs, etc. even in those cases where content templates have been registered, while sending such messages to TSPs (telecom service providers) for delivery," Trai said in a statement.

A total of 17 private and public-sector banks are yet to implement the new SMS framework. E-commerce giant Flipkart, non-banking financial companies (NBFCs) Bajaj Finance Ltd and Indiabulls Consumer Finance Ltd, brokerage firms Kotak Securities Ltd and Angel Broking Ltd, and National Stock Exchange (NSE) are among other companies named by Trai as defaulters.

Trai also listed 40 telemarketers that did not register their SMS template with telecom operators.

“It appears that few entities are not only indifferent but are not serious enough in complying with the provisions of the regulations, thereby, causing inconvenience to consumers…In the absence of these necessary parameters, the messages are bound to be rejected by the system during the scrubbing process," the regulator said.

The new SMS scrubbing norms, or the Telecom Commercial Communication Customer Preference Regulations (TCCCPR), were introduced in July 2018 to “effectively deal with the nuisance of spam", and prohibit unregistered entities from sending commercial messages. Registered firms are also prevented from sending fraudulent messages to customers.

Last week, Trai resumed the new SMS scrubbing rules after their roll out on 8 March led to massive disruptions in online transactions such as net banking, Aadhaar-enabled payments, railway ticket bookings, vaccine registration, among others.

However, the regulator asked telcos to ensure all messages reach subscribers so that the online transactions are not affected due to failure in delivering SMSes or one-time passwords (OTPs). Telcos were directed to monitor and report those SMSes from companies that did not comply with the new rules.

In a letter to operators on 25 March, Trai said some SMSes were found to be non-compliant with the regulations due to reasons such as invalid template IDs or unregistered template.

The new rules mandate telcos to verify the content of every SMS with the registered text before delivering it to consumers. For this, telcos have adopted blockchain-based technology (or distributed ledger technology—DLT) that checks headers, or sender IDs, and content of every SMS originating from a registered source, while unregistered sources are rejected.

This means all transactional and promotional messages are supposed to have a standard template with header, preference and content, which should be registered with the telecom operators.

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