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SBI Reduces Lending Rates by 75 bps, Also Cuts Fixed Deposit Rates

Must Read:

  • SBI cuts interest rates by 75 bps, effective from 1 April ,2020.
  • The new external benchmark-linked lending rate stands at 7.05% from 7.80%. 
  • Repo rate-linked lending rate at 6.65% from 7.40% respectively.
  • The reduction in rates is positive for loan borrowers.
  • Those depending on fixed deposits will see a sharp drop in their earnings.
  • SBI offers senior citizens’ an additional 50 basis point interest rate across all tenors.

State Bank of India (SBI) has announced a cut of 75 basis points in its external benchmark-linked lending rate as well as the repo-linked lending rate. The bank has also reduced its interest rates on deposits by 20-50bps and on bulk deposits by 100 bps. The new external benchmark-linked lending rate stands at 7.05% from 7.80% and the repo rate-linked lending rate at 6.65% from 7.40% respectively.

This big move came soon after RBI has announced a reduction of the same magnitude in the repo rate.  In a statement late on Friday, the country’s largest bank by assets said that with the latest cut, it passed on the entire benefit of the 75-basis point cut by the RBI. SBI said the news lending rates will take effect from April 1, 2020.

The move comes on the back of the RBI making available to banks Rs 3.74 lakh crore through a host of measures. The reduction has brought down interest rates on home loans by up to Rs 30 lakh to 7.95%. SBI said that it would factor in the loan-to-value, whether there is a woman borrower and the risk grade of the borrower before arriving at the final rate. 

However, the reduction in rates is positive for loan borrowers, those depending on fixed deposits will see a sharp drop in their earnings. This is the second interest rate cut on fixed deposits by SBI in a month. 

“Responding to the RBI’s extraordinary monetary policy measures to support the wider economy, the bank passes on the entire 75 basis points (bps) repo rate cut to its borrowers availing loans linked to external benchmark-linked lending rate (EBR) as well as repo-linked lending rate (RLLR),” SBI said in a statement.

Moreover, SBI is also offering senior citizens’ an additional 50 basis point interest rate across all tenors. After today’s revision, senior citizens will get 4% to 6% on FDs maturing in 7 days to 10 years.

Latest SBI FD Interest Rates for General Public Effective, 28 March 2020

Fixed Deposit TenureInterest Rates
7 days to 45 days3.5%
46 days to 179 days4.5%
180 days to 210 days5%
211 days to less than 1 year5%
1 year to less than 2 year5.7%
2 years to less than 3 years5.7%
3 years to less than 5 years5.7%
5 years and up to 10 years5.7%
Latest Updates, Loans

RBI Cuts Repo Rate by 75bps, EMIs on Hold for 3-month:COVID-19 Impact

Highlights:

  • RBI slashes Repo Rate by 75 basis points
  • Key Repo Rate stands at 4.4% and Reverse Repo Rate at 4%
  • RBI allows 3-month moratorium on EMIs and loans
  • All outstanding loans such as- corporate loans, home loans and car loans along with personal loans qualifies for EMI hold
  • RBI also announced a slew of liquidity measures related to TLTRO, CRR and MCLR to ease mounting pressure
  • The decision was taken to support the economy in the wake of the novel coronavirus pandemic

RBI governor Shaktikanta Das has announced a massive rate cut in the repo rate and reserve repo rate to help arrest the economic slowdown in the wake of the coronavirus (Covid-19) outbreak. The Central Bank has lowered the key repo rate by 75 basis points (bps) to 4.4% and the reverse repo rate cut at 4%,down 90 bsp. The decision was taken in the Monetary Policy Committee (MPC) meeting, where the governor has also announced a 3-month moratorium on loan EMIs. This hold of EMIs on all outstanding loans will be a major relief to all concerned stakeholders, including home loan borrowers and developers. This monetary policy review of the RBI was rescheduled in wake of a pandemic which originally scheduled to take place on March 31, 2020 and April 3, 2020.

The Big Bang Rate Cute Move

The RBI’s MPC has voted in favour of an interest rate cut to the tune of 75 basis points, which brings the repo rate down to 4.4% from 5.15%, the lowest in at least 15 Years. 

Talking about a reverse repo rate, it has also been reduced by 90 basis points to 4% in a bid to maintain financial stability and revive growth.

“It is our effort to ensure normal functioning of the market,” the governor said. A big recession coming for all the world, and said India won’t be immune. It all depends how India responds to the situation, he said. 

Global slowdown could make things difficult for India too, despite some help from falling crude prices, he said. Food prices may soften further on record crop, he added. Aggregate demand may weaken and ease core inflation further, he added.

“MPC noted that global economic activity has come to a near standstill as Covid-19 related lockdowns and social distancing in affected countries. Expectations of a shallow recovery in 2020 from 2019’s decade low in global growth have been dashed,” Shaktikanta Das said.

Repo rate is the rate at which RBI lends money to commercial banks, and the reverse repo rate is the rate at which it borrows from them.

EMI, Loans on Hold

It also announced that banks are permitted to allow a three-month moratorium for on payment of EMIs on all term loans that were outstanding on March 1.

“All commercial banks (including regional rural banks, small finance banks and local area banks), co-operative banks, all-India Financial Institutions, and NBFCs (including housing finance companies and micro-finance institutions) (“lending institutions”) are being permitted to allow a moratorium of three months on payment of instalments in respect of all term loans outstanding as on March 1, 2020,” the statement added.

This hold on EMIs applies to all outstanding loans such as- corporate loans, home loans and car loans along with personal loans. This is one of the key takeaways from RBI’s announcements as many people have been financially affected due to the lockdown implemented to prevent novel coronavirus from spreading in India. But it remains to be seen as to what extent this helps customers.

Other Liquidity Measures

Apart from reducing key rates, the RBI also announced a slew of liquidity measures related to TLTRO, CRR and MCLR to ease mounting pressure. RBI will also include measures like-deferring interest payments on working capital; easing of working capital financing; deferment of implementation of the net stable funding ratio; and the last tranche of the capital conservation buffer.

“It has been decided to reduce the Cash Reserve Ratio (CRR) of all banks by 100 basis points to 3% of Net Demand and Time Liabilities with effect from the fortnight beginning March 28 for a period of 1 year,” the RBI governor announced.

The announcement came just a day after the government unveiled a Rs 1.70 lakh crore relief package to shield poor people from the virus outbreak. The RBI’s relief measures announced in view of the Covid-19 pandemic stands at 3.2% of the GDP.

Meanwhile, RBI is also in the process to conduct many other monetary operations for better liquidity management in a bid to support the economy in the wake of the novel coronavirus pandemic.

Banks Updates, Covid 19 Updates, Latest Updates, Loans, Personal Loan, SBI Credit Card

SBI COVID-19 Emergency Credit Line

To help out its borrowers facing hardship due to the spread of Novel Coronavirus COVID-19, India’s largest public-sector lender, State Bank of India (SBI) has announced to make available additional credit facilities to the eligible existing borrowers. With COVID-19 Emergency Credit Line (CECL), SBI will improve the financial conditions of those whose businesses got affected due to the Coronavirus Outbreak.

Details of SBI Covid-19 Emergency Credit Line

  • The Maximum Loan that can be taken is up to INR 2 Crores
  • An Interest Rate of 7.25% is chargeable on the borrowed amount
  • An individual can apply for the SBI Covid-19 Loan up to the 30th of June 2020
  • The Maximum Tenure period for this credit line is of 12 months
  • The Loan amount will be payable into easy EMIs of 12 months
  • Additional loan up to 10% of the existing Fund Based Working Capital Limits (FBWC) 
  • All the customers who have a running loan can take a top-up loan up to 10% of their current loan from SBI during the Corona Virus Crisis.

Eligibility Criteria

All the standard account holders are eligible to take the loan except the Special Mention Accounts. The SMAs are those accounts whose turning potential is taken as the Non-Performing Assets. According to the State Bank of India, there are two types of SMA.

SMA-1

The accounts that have the overdue period between 31 days to 60 days fall in the category of SMA-1 accounts.

SMA-2

The accounts that have the overdue period between 61 days to 90 days fall in the category of SMA-2 accounts.

Advantage of Credit Line

Fight Financial Crisis:- Due to lockdowns many businesses have got affected leading to the financial crisis.  Therefore, this small help from SBI can resolve your financial crisis and when the crisis of Covid-19 ends, you can continue your business smoothly.

Manage the Loss:- Due to the Janta Curfew all over India; the sales of many businesses have gone down. So this Emergency Credit Line can help you to compensate for the losses that have occurred due to lockdowns.

Maintain Liquidity:- The SBI Covid Loan will help you to maintain liquidity in your business. You can draw cheques for payments to the creditors if you have enough balance into the bank account. This loan will simply help you face the crisis that will occur in the future once the Coronavirus crisis finishes.

Conclusion

Well, it is a great opportunity for the SBI account holders to gear up the speed of their businesses with the help of SBI Covid-19 Loan. You can enjoy the facility of the Covid-19 Emergency CreditLine and face the financial crisis happening due to the CoronaVirus. It is an economic disaster but the State bank of India is giving you the opportunity to overcome this disaster with the help of the Emergency credit line. Use this facility of SBI and boost up your business performance.

Banks Updates, Latest Updates

Difference Between NEFT, RTGS & IMPS

When it comes to transferring money online from one account to another, most banks provide multiple options based on various factors and customer’s requirements. Currently in India, online fund transfer happens either with NEFT, RTGS or IMPS as these are the three different and widely used payment avenues offered by the banks. All three modes make online fund transfer easy, quick and secure yet have different kinds of features and flexibility. Based on the value of the transaction, the speed of transfer, service availability, and other factors, each one of the fund transfer facilities is different from one another. So, are you well-versed in the difference between the 3 modes? Know the difference and insights about these three fund transfer methods. 

Difference Between NEFT, RTGS & IMPS

Basis of ComparisonNEFTRTGSIMPS
Minimum Transfer ValueRe.1Rs.2 lakhRe.1
Payment OptionsOnline & OfflineOnline & OfflineOnline 
Maximum Transfer ValueNo LimitNo LimitRs.2 lakh
Fund Transfer Speed2 hours (subject to cut-off timings and batches)ImmediateImmediate
Settlement TypeHalf Hourly BasisReal TimeReal Time
Service Timings8 am-7pm working days (except 2nd & 4th Saturday)8 am-6pm (for working days)Available 365 Days:24/7
Inward Transaction ChargesNo ChargesNo ChargesDecided by Individual Member Bank PPls
Managed BYRBIRBINPCI

Key Factors That Differentiate the  NEFT, RTGS & IMPS

  • Timing: The available hours for each type of fund transfer depend on the individual bank and their customer service schedule. NEFT and RTGS services will be unavailable on weekends and bank holidays, while IMPS services can be availed round the clock. Also, NEFT transfers funds in timed batches, while RTGS and IMPS are real-time transfer modes.
  • Transaction Limit: This is one of the most important differences. NEFT and IMPS have no minimum value, while RTGS has a minimum fund value of Rs. 2 lakhs. Each mode has a different maximum fund limit.
  • Service Fee: The fee charged for the fund transfer transaction varies between the three modes. RTGS is comparatively expensive, while NEFT and IMPS are less so.
  • Transaction Speed: NEFT has fixed batch time slots and can take around 2 hours for the recipient to receive the funds, whereas RTGS and IMPS transfers take place in real time and are usually complete within minutes.

What is NEFT (National Electronic Fund Transfer)

The funds transferred under this method are settled in batches (based on Deferred Net Settlement (DNS) and at a specific time of the day. If the transfer is initiated beyond the cut-off time specified by RBI, the funds are typically settled on the next working day. One of the biggest advantages of NEFT is the cost-effectiveness, an individual can carry out smaller value transfers without worrying about the transaction fee and service charges. A smaller fee on the transfer enables the individual to carry out more payments which makes NEFT the most popular and extensively used method for online fund transfers.

Under NEFT, the transactions can be initiated and settled from the bank account of one particular bank to another bank’s account throughout India at no additional cost apart from the standard charges, provided both the banks are a part of the NEFT transfer network (NEFT-enabled). Though some banks might have their own policies concerning the NEFT service provided by them, such as restrictions on transferring funds immediately to a newly added beneficiary, fund value limits restricting the value of transfer beyond a specified limit, etc., these protocols are proven to be effective for safeguarding the customer’s financials.

What is RTGS (Real Time Gross Settlement)

This type of transfer method is applicable and available for fund transfers of a minimum of Rs.2 lakh and there is no upper limit, however, the biggest advantage for RTGS is the fastest/real-time settlement factor. As soon as the transfer instructions are sent, the fund gets settled almost immediately. However, in order to take advantage of the RTGS facility, both the originator’s and the beneficiary’s account has to be RTGS-enabled. Even though most banks are a part of the vast and popular RTGS transfer network facilitated by RBI, individuals are recommended to either get in touch with their bank directly or refer to their online banking section to discover their eligibility concerning access to RTGS payment system. The transaction fee under RTGS is higher than the other methods due to the faster settlement speed performed on an instruction by instruction basis.

RTGS comes with limits on the minimum; however, there’s no maximum fund value and it is efficiently used in situations where individuals and businesses require immediate settlement of high-value funds that are well within the specified limits. Efficiency, speed, and reliability factors are few among the many factors that make RTGS as one the most-sought medium of online fund transfers.

What is IMPS (Immediate Payment Service)

Also known for being one of the popular and fastest methods of fund transfer, IMPS is used widely across most banks. Unlike other methods of fund transfer that become unavailable on bank holidays and during off working hours, IMPS functions 24/7 allowing a fund transfer at any time of the day. Similar to NEFT, IMPS also allows the transfer of low value-funds but what makes it unique is, it immediately settles the funds. NEFT functions as more or less the combined version of NEFT and RTGS, where remitters are neither worried about the size of the fund and service availability nor do they have to be concerned about the settlement speed.

IMPS facility is provided only on the internet and online banking services. Few banks may offer SMS-based IMPS service to mobile banking users. Many of the digital wallets in India utilise IMPS services to credit the money from an individual’s wallet to his/her bank account. Though IMPS provides an immediate fund settlement facility, the transaction fees are as low as NEFT.

Benefits of Online Fund Transfer:

  • Reliable
  • Fast 
  • Convenient
  • Secure
  • Flexible
  • Automatic
  • 24/7 Available

Things to Keep in Mind Before Initiating an Online Fund Transfer

  • Timings: The timings for each type of fund transfer methods are specific to the bank. Since NEFT and RTGS are largely based on the bank’s hours of operation, depending on the location and specific working hours, the service availability may differ for either of the parties involved in the fund transfer.
  • GST:  GST is applicable on the transaction fee as per the latest norms which are subject to change.
  • Transaction Fee:  A fee is charged for initiating the transfer and not for receiving the funds.
  • Transfer Network: The remitter needs to check whether the beneficiary’s account is eligible to receive funds or not since the bank might not be a part of the transfer network.

Quick Tip: Before initiating a transfer using any of these modes, read the applicable conditions and rules (if any). Consult your bank in case of queries and verify the details with a bank official to stay on the safer side.

Frequently Asked Questions (FAQs)

Q.What is the minimum amount for an IMPS transfer?

A.The minimum amount transferable through an IMPS transfer can be as low as Re.1. The maximum amount which can be transferred through IMPS transfer is Rs.2 lakh. IMPS transfers are not trackable and any amount more than Rs.2 lakh will require an RTGS transfer.

Q.Are there any extra charges for an IMPS transfer?
A.The Finance Ministry of India, in order to encourage digital transactions, has removed any kind of additional fee for an IMPS mode of money transfer. However, there are additional charges for NEFT transfers which start from Rs.2.50 for a transaction of up to Rs.10,000.

Q.Which mode of payment between NEFT or RTGS is faster?
A.The faster form of payment depends on the urgency and the amount of your transaction. If you have a transaction above Rs.2 lakh, RTGS is a faster and more effective mode of payment. However, for any payments which are of lower amounts, NEFT is a more efficient mode of payment.

Q.Is RTGS mode of payment safe?
A. RTGS is a highly safe and secure mode of payment which is monitored by the government. It is even more secure as it is used majorly for money transfers of higher amounts. RTGS is available for all the days of the week including Saturdays.

Q.How many times can NEFT transactions be done in a day?
A. NEFT transactions can be made at any time of the day between 8 a.m. to 6:30 p.m. There is no limit to the number of NEFT transactions in a day however, for every NEFT transaction, a maximum of Rs.50,000 can be done at one time.

Government Updates, Latest Updates, RBI Updates, Scheme

How to Fill EPF Withdrawal Form Online to Get Claim

When it comes to EPF withdrawal, the first step that you need to do is to fill the required form. Yes, in order to process your request further, filling a PF form is mandatory. You can fill the form either online or offline and can get your claim. The EPF withdrawal claim can be made by an employee if he is unemployed or when he retires. However, the online process of the PF claim is easy and time-saving hence is preferred by many. But to use the online withdrawal claim facility, your aadhaar is mandatory to be linked with your UAN. Yes, every EPF member has its own UAN and it is compulsory to link your 12-digit numeric number with it to reap the benefits. Once your aadhaar is linked with the EPF account, you can easily go through the claim process and get the funds in your linked bank accounts. 

How to Fill EPF Withdrawal Form

Follow the steps mentioned below to fill your PF form to get the claim online.

EPF Withdrawal Online to Get the Claim

Step 1: Visit the official website of EPF and sign in with your UAN and password

UAN Member Portal

Step 2: From the top menu bar, click on the ‘Online Services’ and select ‘Claim (Form-31, 19 & 10C)’ from the drop-down menu

Click Claim (Form-31, 19 & 10C) for EPF withdrawal

Step 3: Member Details will be displayed on the screen. Enter the last 4 digits of your bank account and click on ‘Verify‘

Member Details

Step 4: Click on ‘Yes’ to sign the certificate of the undertaking and proceed further

Undertaking for EPF withdrawal

Step 5: Click on the ‘Proceed for Online Claim’ option

Step 6: Select ‘PF Advance (Form 31)’ to withdraw your funds online

New form

Step 7: A fresh section of the form will open, wherein you have to select the ‘Purpose for which advance is required’, the amount required and the employee’s address

Step 8: Tick on the certification and submit your application

Step 9: You may have to submit scanned documents depending on the purpose for which you have filled the form

Step 10: Your employer has to approve your withdrawal request after which the money will be withdrawn from your EPF account and deposited in the bank account mentioned at the time of filling the withdrawal form.

Note: An SMS notification will be sent to your mobile number registered with EPFO. Once the claim is processed, the amount will be transferred to your bank account. Although no formal time limit has been provided by the EPFO, the money usually gets credited within 15-20 days.

Who is Eligible for EPF Withdrawal

  • Money from the EPF account can be withdrawn only after retirement. EPFO considers early retirement only after the person has crossed 55 years of age
  • Partial withdrawal of EPF is permitted only in the case of a medical emergency, house purchase or construction, or higher education
  • EPFO allows withdrawal of 90% of the amount 1 year before retirement
  • One can withdraw the EPF corpus if he/she faces unemployment before retirement due to lock-down or retrenchment
  • As per the new rule, only 75% of the corpus can be withdrawn after 1 month of unemployment. The remaining will be transferred to the new EPF account after gaining employment
  • Employees do not need to wait for approval from their employer for withdrawing their EPF. By linking UAN and Aadhar to your EPF account, you do get the approval online
  • While making the claim online, you must have-
    • An active UAN number
    • Bank details linked with UAN
    • PAN and Aadhar details seeded into EPF database

Documents Required for EPF Withdrawal

  • Composite Claim Form
  • Two revenue stamps
  • Bank account statement (The bank account should be only in the name of the PF holder while he/she is alive)
  • Identity proof
  • Address proof
  • One blank and canceled cheque with clearly visible IFSC code and account number
  • Personal information such as father’s name, date of birth, etc. should clearly match with the identity proof

Note: If an employee withdraws his PF amount before 5 years of continuous service, he is liable to facilitate ITR Forms 2 and 3 in order to prove a detailed breakup of the entire amount deposited in the PF account every year.

How to Check EPF Claim Status Online

You can easily check EPF claim status online at the EPF member portal. You first need to log in to the portal online and select track Claim Status under the Online Services section. 

Note: You will not have to enter any reference number to check the status, it will be displayed on the screen automatically. 

When to Withdraw EPF?

  • When an individual retires
  • When an individual remains unemployed for more than two months: To make a withdrawal in this circumstance, the individuals must get an attestation of the same from a gazetted office.

Reasons for EPF Withdrawal

Reasons for withdrawalLimit for withdrawalNo of years of service criteriaOther conditions
MarriageUp to 50% of employee’s share of contribution to EPF7 yearsFor the marriage of self, son/daughter, and brother/sister
EducationUpto 50% of employee’s share of contribution to EPF7 years
Purchase of land/purchase or construction of a houseFor land – up to 24 times of monthly wages plus Dearness allowance



For house – up to 36 times of monthly wages plus dearness allowance		5 YearsThe asset, i.e. land or the house should be in the name of the employee or spouse or jointly.
Home loan Up tormentUp to a maximum of 90 %, from both employee’s contribution and employer contribution in Employee Provident Fund.10 yearsThe property should be registered in the name of the employee or spouse or jointly
Withdrawal permitted subject to furnishing of requisite documents as called for by the EPFO relating to the housing loan availed,
The accumulation in the member’s PF account (or together with the spouse), including the interest, has to be more than Rs 20,000
Renovation of houseUp to 12 times the monthly wages5 yearsThe property should be registered in the name of the employee or spouse or jointly.
A little before Up tormentUp to 90% of accumulated balance with interestOnce he reaches 57 years (as per recent amendment)Torment

Benefits of EPF Withdrawal Online

Easy Process: The online process gives you a hassle-free withdrawal facility, where you don’t need to stand in the long queues. 

Time Saving: With the online claim, the amount will instantly be processed into your bank account i.e. within 15-20 days of the application. However, the processing time may vary as per the government. 

No Physical Verification: Unlike offline claims, wherein you have to get your documents attested by the employer, online claims get verified automatically without any hassle. 

Government Updates, Latest Updates

Pradhan Mantri Awas Yojana

The Pradhan Mantri Awas Yojana was introduced by the Prime Minister in 2005 with a clear vision of ‘Housing for All’. To boost affordable housing this scheme has been launched for the urban poor population of India.The real objective of the scheme is to provide over 2 crore affordable houses made with eco-friendly construction methods in selected cities of India. The scheme comes with many features like Credit Linked Subsidy Scheme (CLSS) under which interest benefits can be availed by first-time home loan buyers. One can easily apply for PMAY online with the help of his 12-digit aadhaar card number. Moreover, there are many public as well as private lenders which are linked with PMAY, thus offering various home loan schemes to the borrowers.        

What is Pradhan Mantri Awas Yojana (PMAY)

The Pradhan Mantri Awas Yojana (PMAY) scheme was launched by the Government of India to boost the affordability of houses against an inflated real estate sector. The scheme aims to achieve its objective of “Housing for All” by 31 March 2022. Mantri Awas Yojana  has two components:

  • Pradhan Mantri Awas Yojana Urban (PMAY-U)
  • Pradhan Mantri Awas Yojana Gramin (PMAY-G)

PMAY Eligibility

  • Any member of the beneficiary family should not own a pucca house in India
  • The Beneficiary family should not have availed any housing scheme from the Government of India/State Government
  • Beneficiary family should not have availed PMAY subsidy from any of the Primary Lending Institutions (PLIs)
  • Home loan borrowers who availed the subsidy but during the loan tenure switched to another lender under home loan balance transfer cannot claim the benefit again
  • Beneficiary families under the MIG income group need to furnish their Aadhaar numbers to avail the benefit

How to Apply 

  • Visit the PM Awas Yojana official website http://pmaymis.gov.in/
  • Under the “Menu” section, find the “Citizen Assessment” option
  • Enter your 12-digit Aadhaar card number
  • Once you have entered your Aadhaar information, you will be redirected to the application page
  • You will be asked to enter your personal details, income details, current residential address, and your bank account details
  • Enter all information in the application
  • Click on “I am aware of” option at the end of the page and click the “Save” button
  • Once you click the “save” option, you will see a system generated application number which you can save for future reference
  • Download and print the duly-filed application
  • Submit the form at your nearest CSC office centres and financial institution/banks along with the required documents

Beneficiaries Under PMAY

  • The Pradhan Mantri Awas Yojana (Urban) scheme caters mainly to the housing requirements of the urban poor.
  • Beneficiaries of PMAY(U) mainly include Middle Income Groups (MIGs), Low-income Groups (LIGs) and Economically Weaker Section (EWS). 
  • To be recognised as a LIG or EWS beneficiary under the Scheme, the applicant is required to submit an affidavit as income proof to the authority.

PMAY Subsidy and Offers

ParticularsEWSLIGMIG-1MIG-2
Annual Household IncomeUp to 3 lakh3 to 6 lakh6 to 12 lakh12 to 18 lakh
Interest Rate Subsidy6.50% p.a.6.50% p.a.4.00% p.a.3.00% p.a.
Home Loan Tenure (Max)20 years20 years20 years20 years
Maximum Eligible Home Loan Amount to Qualify for SubsidyRs.6 lakhRs.6 lakhRs.9 lakhRs.12 lakh
Maximum Dwelling Unit Carpet Area30 sq. m60 sq. m160 sq. m200 sq. m
Maximum Interest Subsidy AmountRs.2.67 lakhRs.2.67 lakhRs.2.35 lakhRs.2.30 lakh
Discount Rate for NPV Calculation of Interest Subsidy9.00%9.00%9.00%9.00%

Features of PMAY

  • The interest subsidy rate provided by the scheme is up to 6.5% on housing loan to all beneficiaries taking loans with a tenure of up to 20 years
  • Interest rate subsidy, however, varies basis income slabs
  • Up to 6 lakh per annum – Credit-linked subsidy of 6.5% will be available for loan amounts up to Rs.6 lakh
  • Up to 12 lakh per annum – People earning up to Rs 12 lakh per annum will get 4% interest subsidy on a loan amount of Rs.9 lakh
  • Up to 18 lakh per annum – People earning up to Rs 18 lakh per annum income category will get a 3 percent subsidy on a loan amount of Rs.12 lakh
  • Any additional loan beyond the subsidized loan amount will be at a nonsubsidized rate
  • Under the PMAY scheme, differently-abled and senior citizens can get the preference of having a house on the ground floor
  • Houses will be constructed using sustainable and eco-friendly technologies

PMAY Documents

  • Duly filled Application Form
  • Self-Attested Income Certificate (needed if you fall below the taxable limit) and income proof Income Proof/salary slip
  • ID proof – PAN Card / Aadhar No. / Voter’s Card/ Driving License, etc.
  • Copy of Address Proof
  • Latest I.T. Return /Form 16
  • Bank Account Statement for last 6 months
  • Valuation certificate
  • Approved plan of Construction
  • Certificate for architect or engineer confirming the cost of construction/repairs
  • Architect’s certificate regarding the life and fitness of Flat/ House in case of purchase
  • Agreement for construction with Builder/ Developer
  • NOC from Housing Society or any Competent Authority
  • Receipt of advance payment made to builder/seller
  • Affidavit from the applicant confirming that neither they nor any family member owns a pucca house in India
  • Property papers, such as Letter of Allotment of Property or Agreement

Top Banks Offering Home Loan Schemes Under PMAY 

  • SBI
  • ICICI
  • HDFC
  • Kotak Mahindra Bank
  • Axis Bank
  • Bank of Baroda
  • YES Bank
  • Fullerton India
  • Federal Bank
  • Karnataka Bank
  • Bajaj Housing Finance Limited
  • Indiabulls
  • IIFL
  • Karur Vysya Bank
  • LIC Housing Finance

Due Dates of PMAY

Take a look at the due dates for PMAY in the table below. 

ParticularsPhase 1Phase 2Phase 3
Start Date04/01/1504/01/1704/01/19
End Dates03/01/1703/01/1903/01/22
Cities Covered100200Remaining Cities

PMAY Customer Care Helpline Numbers

1800-11-3377, (Gramin),1800-11-3388 (Urban,NHB),1800-11-6163 (HUDCO). Call on these numbers anytime and get the relevant answers to all your queries. You can dial these numbers anytime and get the best solutions to all your problems. These helpline numbers are 24×7 available hence the professionals will always there to assist and help you in the best way. 

Frequently Asked Questions (FAQs)

Q.Who is eligible for Pradhan Manti Awas Yojana?

A.The following individuals and families are eligible for PMAY:

  • Economically Weaker Section (EWS) – Families with an annual income up to Rs. 3   Lakh
  • Low Income Group (LIG) – Families with an annual income between Rs. 3 Lakh and Rs. 6 Lakh
  • Middle Income Group I (MIG I) – Families within an annual income between Rs. 6 Lakh and Rs. 12 Lakh
  • Middle Income Group II (MIG II) – Families with an annual income between Rs. 6 Lakh and Rs. 12 Lakh
  • Women belonging to EWS and LIG categories
  • Scheduled Caste (SC), Scheduled Tribe (ST), and Other Backward Class (OBC)

Q.How to apply for this PMAY Scheme?

A.The beneficiaries can apply for PMAY through online and offline mode. In online mode, you can use an aadhaar card to apply. While offline, you simply need to fill and submit the form at a common service centre. 

Q.Are there any charges applicable at the time of PMAY application?

A.Yes, the minimal charges of Rs.25+GST is to be paid at the time of submitting the form. Whereas in online mode, no charges involved.  

Q.Is Pradhan Mantri Yojana available to existing home loan borrowers?

A.Yes, existing home loan borrowers are also eligible for this scheme once they fulfill all the relevant eligibility criteria.

Banks Updates, Latest Updates, Loans, Personal Loan

YES Bank’s Cash Withdrawal Limit Stands at Rs.50,000

Highlights:

  • YES Bank cash withdrawal limit capped at Rs.50,000 by RBI
  • YES Bank has been placed under a moratorium of one month, starting from 5 March until 3 April, 2020
  • Restrictions on both current as well as savings account customers
  • Under certain emergency conditions account holders can withdraw cash of up to Rs.5 lakh
  • The withdrawal limit for depositors may remain in effect for this period unless the RBI releases another notification
  • Within a month, the RBI will decide a plan of action for YES Bank and also assured the depositors that there is no need to panic

The Reserve Bank of India (RBI) on Thursday put restrictions on the cash withdrawal for YES Bank Customers. As per RBI’s directive, YES Bank customers can only withdraw up to Rs.50,000 from their respective bank accounts for a month starting from 5 March until 3 April, 2020. The Central Bank of India has also notified that YES Bank can not renew or grant any loan or advance and also cannot invest or incur any liability. In addition to this, the bank also cannot transfer or dispose of properties or assets.  

YES Bank has been placed under a moratorium and is constantly watched by the RBI. Moreover, the Reserve Bank of India is also coordinating with more banks to form a consortium of banks just to review. However, the top officials of RBI have stated that the YES Bank crisis will be resolved in a month. 

Though apex bank has imposed restrictions on money withdrawals for both current as well as savings account customers, under certain emergency conditions account holders can withdraw cash of up to Rs.5 lakh. The bank will show leniency towards emergency conditions like medical treatment, higher education, paying obligatory expenses in case of marriage or any unavoidable emergency. Within a month, the RBI will do a thorough inspection of YES Bank and will decide a plan of action so that the depositors will not face hardship for a long period.

The RBI’s Plan of Action

However, the Central Bank of India will soon have a clear picture of the asset quality of the bank as Mr. Prashant Kumar, former Deputy Managing Director and CFO of State Bank of India is investigating the case as an Administrator hence will present a report in front of the RBI. Speculations are being made that RBI might do a merger, takeover by another entity or put more capital from public sector banks and other financial institutions. 

Why Did YES Bank Collapse?

According to experts, the actual reason for YES Bank’s collapse was price due issues such as deteriorating financial position, governance issues, false assurance on raising funds, non-serious investors, and outflow of liquidity. 

What RBI Says

Moreover, The Reserve Bank has assured the depositors of YES Bank, there is no need to panic as this crisis will be resolved shortly. 

Government Updates, Loans, Personal Loan, Scheme

Government Loan Schemes for Women Entrepreneurs

With the rising names of many successful women entrepreneurs, India is a country to watch out. And in order to turn the dreams into reality, the Indian government is providing a financial boost by launching many schemes for women. Yes, there are many government loan schemes for women entrepreneurs, specifically designed for career-oriented women. Those who want to make big in their lives but due to lack of funds won’t be able to meet their goals. Well, not anymore. That’s Right! With the government offering many best schemes, it would be easy for such women to complete their entrepreneurship dreams.

Apply Personal Loan Online and Get Instant Loan e-Approval.

Mudra Yojana

One such scheme that helps aspiring entrepreneurs to start their business is Mudra Yojana. Under this scheme, financial assistance has been given in the form of business loans, encouraging women to set up small enterprises. Yes, businesses like catering, tailoring, beauty & skincare enterprises, etc can easily be opened. Available with a maximum loan amount of Rs.50 lakh, Mudra Loans are unsecured loans that are available without collateral. Avail it from many banks, NBFCs, and microfinance institutions. 

Annapurna Scheme

This scheme is offered by State Bank of Mysore and Bhartiya Mahila Bank under the provision of the government of India. Under this scheme, the funds are provided to women entrepreneurs who are in the food catering business. The maximum loan amount is Rs.50,000 which can be given for a tenure of up to 36 months.This loan amount can be used for working capital needs such as buying utensils, cutlery, appliances, etc. A guarantor is required to avail the loan with the first EMI is paid by the lender itself. 

Stree Shakti Package for Women Entrepreneurs

This amazing scheme is run by the State Bank of India (SBI), to support entrepreneurs among women. This scheme is for those women who have major ownership (say 50%) in a small business. Not only this, entrepreneurs have to be enrolled in the Entrepreneurship Development Programme (EDP) organized by their respective state agency. An interest rate concession of 0.05% on loans exceeding to Rs.2 lakh is given to the borrowers. And, no security is required for a loan amount of up to Rs.5 lakh. 

Cent Kalyani Scheme

This scheme is offered by the Central Bank of India and can be availed by both existing and new entrepreneurs and self-employed women. This scheme supports businesses like farming, handicrafts, food processing, garments, tailoring, beauty, etc. Borrowers can get a loan of up to Rs.1 crore with a margin rate of 20%. You do not require any collateral or security and it comes with a maximum tenure of 7 years. 

Mahila Udyam Nidhi Scheme

Offered by Punjab National Bank, this scheme is majorly for women entrepreneurs who want to start a small-scale venture with a loan of up to Rs.10 lakh. And, the same can be repaid within 10 years at an attractive interest rate. 

Dena Shakti Scheme

Here, a loan of up to Rs.20 lakh can be availed for agriculture, manufacturing, micro-credit, retail stores or small enterprises. A concession of 0.25% on interest rate is also offered so that repaying the loan would be easy. 

Orient Mahila Vikas Yojana Scheme

This scheme is offered by Oriental Bank of Commerce to those women who hold 51% share in the capital individually or jointly proprietary concern. No security or collateral is required for loans between Rs.10 lakh to Rs.25 lakh, given to small scale industries. The loan can be repaid within 7 years and also comes with a concession of up to 2%. 

Banks Updates, Latest Updates, Loans, Personal Loan

Best Adventure Places in India to visit During Summers

We all love adventures in life, don’t we? And, what if you will get an adventurous vacation filled with thrilling activities? And, the best time to enjoy such an experience is during summers. Yes, the best way to escape the scorching heat is to plan an amazing holiday at some of the remarkable places in India. India is known for many adventurous activities and is considered to be the perfect spot for all the adventure junkies. 

So, if you are someone who is looking for the best adventure places in India during summers, this post is for you. Well, if you are on a tight budget and cannot afford a vacation, apply for personal loan online. Yes, an instant personal loan comes handy to fulfill your travel aspirations and is instantly approved and disbursed. So, keep all your worries aside and let’s just know about the best spots to enjoy adventure activities in India.

Top 10 Place to Visit in Summer in India

1.Bir-Billing: A beautiful village situated in the Joginder Valley of Himachal Pradesh, Bir-Billing sets the vibe of an idyllic village setting. This village is always full of paragliders enjoying this adventurous sport. The hills and the pleasing weather make Bir-Billing an ideal spot for paragliding. Thus, it is also known as the paragliding capital of India. 

Things to do: Paragliding in the Bir Valley

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2.Rajasthan: Apart from royal palaces and forts, Rajasthan is also a famous spot for hot air ballooning. You can either choose to train in the science of hot air ballooning and then perform the activity under the supervision of experts. Enjoy the bird’s eye view of Jaisalmer, Jodhpur and Jaipur. 

Things to do: Hot air balloon ride

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3.Rishikesh: Located on the banks of the Ganga River in the Northern States of Uttarakhand, Rishikesh is not only a yoga capital and a pilgrimage centre. Yes, the place is also considered to be an ideal spot for thrill-seeking tourists. River rafting, cliff climbing, bungee jumping are some adrenaline activities best explored here. 

Things to do: White water rafting, bungee jumping, cliff climbing

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4.Auli: Auli is a beautiful town and a hidden gem located in the states of Uttarakhand. This beautiful town is blessed with natural beauty in the form of steep winding slopes, clean environment, and monolithic mountain tops. The trekking routes of Kuari Pass and Gorson Valley will surely take your breath away.

Things to do:Trek to the Kuari Pass or Ski in the mountains

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5. Dandeli: Situated on the Karnataka-Goa border, this place offers a list of adventure activities like wildlife spotting, trekking, fishing, wildlife photography and kayaking. In Dandeli a sanctuary is also located, where one can go for jeep safari and wildlife experience. 

Things to do: Jungle safari

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Goa

6.Goa: Being the most visited tourist spots in India, Goa is blessed with breathtaking beauty such as open blue seas,clean & serene beaches. You can explore this place for parasailing, paragliding, scuba diving, kayaking and snorkelling. 

Things to do:Parasailing, Paragliding and Scuba diving

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7.Andaman Islands: A union territory of India located to the south of the country, Andaman Islands is known for many water-based activities. Activities, like snorkeling in the crystal clear water or discovering the sea life with scuba diving are must here. 

Things to do: Scuba diving and snorkelling 

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8. Bandhavgarh National Park: This National Park is located in the state of Madhya Pradesh and is particularly famous for wildlife enthusiasts. The park is best known for the elephant and tiger safari and is a true habitat that makes you marvel at nature’s beauty. 

Things to do: Tiger safari and elephant safari

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9. Kerala: Being a home to a coastline that remains evergreen, adding to the states ethereal beauty, Kerala enables windsurfing as an activity that you must try. The cool and windy environment with a perfect combination of massive waves, making windsurfing a popular sport. 

Things to do: Windsurfing

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10. Sikkim: A beautiful state in the Northeastern part of India with a proximity to the Himalayan range, Sikkim is a place to be engaged in mountaineering activities. With some remarkable mountains, peaks and routes, Sikkim is the perfect place to try out some excellent sports. 

Things to do:Mountain climbing

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Hope, this post gave you enough insights on some of the best adventure places in India. And, in case you are falling short of funds to explore these destinations, apply for a personal loan online. The loan comes to you at attractive interest rates, minimal documentation and flexible repayment tenures to choose from. So, what are you waiting for? Avail, a personal loan today and satisfy your cravings for that perfect adrenaline rush. 

Latest Updates

How to Register EPF Grievance Online?

Individuals dealing with issues or complaints regarding Provident Fund can register their grievance with EPF department online. In case you are wondering about EPF registration online, members can easily register their queries and complaints on the official website of EPF i-Grievance. The individuals can also send reminders for pending complaints and know the status of their request.  It would be advisable that members/individuals should have registered/activated Universal Account Number (UAN) along with the verification by aadhaar and bank account as the same will help in processing a request faster. However, to lodge a complaint, an individual must have an EPF UAN Number as the same has been made mandatory by the government. Moreover, an individual can register a complaint about various issues like-PF withdrawal, pension settlement, cheque return/misplacement, issues related to PF balance, etc. 

How to Register EPF Grievance on EPF i-Grievance Management System?

Step 1: Visit the Official website of EPFi-Grievance Management System

Register-Grievance

Step 2: Click on Register Grievance 

Step 3: Select your Status from options like:PF Member,EPS Member,Employer,Others

Step 4:Suppose, if you are a PF Member and if you click on the same, you need to enter the following details:

Universal Account Number

Type the numbers shown in the image and click on Get Details

Step 5:Enter the remaining details like:Name, Email Address and Mobile Number and Click on Get OTP

Get-Details_3

Step 6:Enter the OTP sent on your registered mobile number

Step 7:In the next step, enter your grievance details like:grievance related to, grievance category, grievance description and upload the supporting document in PDF format and click on Attach

epf-grievance-details

Step 8:Enter the captcha shown and click on submit

Step 9:Soon after submitting your request, a Unique Registration Number will be sent to your registered email.

Step 10:The EPFO Management will verify your complaint and forward the same to the concerned personnel for resolution

How to Check your EPF Grievance Status?

Step 1: Visit the Official website of EPFi-Grievance Management System

Register-Grievance

Step 2: Click on View Status

Step 3:Enter your Registration Number, Grievance Password OR Mobile Number/Email ID and Type the numbers shown in the image

View-Status-Form

Step 4:Click on Submit

Step 5:The status of the complaint will be displayed on the screen

Sending Reminder about Complaint

Step 1: Visit the Official website of EPFi-Grievance Management System

Register-Grievance

Step 2: Click on Set Reminder

Step 3:Enter your Registration Number, Grievance Password OR Mobile Number/Email ID and Type Reminder Description and also type the numbers shown in the image

unnamed

Step 4:Click on Submit

Note:A reminder will be sent to the relevant department regarding the complaint.

Individuals can Register EPF Complaints for Issues Like:

  • Issue of Final Settlement / Withdrawal of PF
  • Transfer of PF accumulations (F-13) 
  • Scheme certificate (10C)
  • Settlement of pension (10D)
  • Issue Of PF slip / PF Balance 
  • Payment of insurance benefit (5IF) 
  • Cheque returned / misplaced

Frequently Asked Questions (FAQs)

Q.How can I receive my EPF grievance registration number?

A.Soon after registering for EPF grievance, you will receive your registration number on the registered email id. It would be advisable to keep your registration number saved for the future purpose, in case you forget your password or login details.

Q.How can I check my EPF grievance status online?

A.An individual can check his EPF grievance status on the official website of EPF i-Grievance Management. You simply need to click on View Status.

Q.How EPF complaints are tracked?

A.The concerned management has been given strict timelines to resolve the complaints. However, proper monitoring of the complaints is done regularly. 

Q.When can I expect to get my PF claim?

A.It nearly takes around 5-30 days from the date of application to receive the PF amount to your bank account online. While it takes 20-30 days offline.

Q.What is the customer care number of EPF grievance?

A.1800 118 005 is the toll-free number to get in touch with EPF grievance customer care.

Latest Updates, Scheme, Union Budget

Budget 2020-21: What Impact Banks Will Face Due to Increased Insurance Depository Cover Limit of Rs.5 lakh 

Union budget 2020 is finally here and Finance Minister Nirmala Sitharaman in her speech made a big announcement related to insurance cover for bank depositors to Rs. 5 lakh from the existing Rs.1 lakh. According to financial experts and analysts, this hike in deposit cover banking will hit the banks on the bottom line as banks will likely witness a setback of 0.5%-2% from the next financial year owing to a fivefold increase in the fixed deposits cover announced in the budget. According to industry experts, the impact would be high on public sector banks as private sector banks would find a way to offset operating costs. This depository update will create an impact on the profitability and the challenge would be more for biggies with a high deposit base.  

What is an Insurance Depository Cover?

An insurance deposit is a protection cover against losses on bank deposits if a bank fails financially and has no money to pay its depositors. All deposits maintained by a depositor across all branches of a failed bank are clubbed together for the purpose for availing of the deposit insurance scheme.

The deposit insurance scheme covers all banks operating in the country, including the private sector, co-operative and branches of foreign banks in India. The scheme insures all categories of bank deposits, including savings, fixed and recurring deposits, and the deposits are insured by Deposit Insurance and Credit Guarantee Corporation (DICGC), which is a subsidiary of Reserve Bank of India.

Pre Budget 2020 Insurance Depository Norms

Talking about the previous rules of Reserve Bank of India (RBI), when a bank fails then each depositor was insured up to a maximum of Rs.1 lakh for both principal and interest amount. Currently, banks pay Rs.10 paise for every Rs.100 deposits insured RBI’s arm Deposit Insurance and Credit Guarantee Corp (DICGC). The insurance coverage of Rs.1 lakh was irrespective of the deposit held by the customers in the savings or fixed deposit account. And, has been in the force since 1993 when the cover was raised from Rs.30,000 to Rs.1 lakh. However, Rs.15 paise for every Rs.100 would be the maximum premium that can be charged to banks as per the existing DICGC norms. 

What Banks Will Follow Post Announcement of Depository Cover Hike

Soon after the announcement made by the Finance Minister, the government came in action hence sent out a message that the banks will not pass on the hike in the form of premiums to its customers. During the interaction with the media, the Finance Secretary said banks cannot pass on the hike in premiums to its customers, according to the norms. 

“The premium won’t go up substantially in any case and maybe hiked to 12-13 paise (per deposit of `100 a year),” he added.

A Challenge for Public Sector Banks

According to financial experts and analysts, it would be a challenge for public sector banks to deal with the increased cost as the hike in the deposit cover is much more than expected. The banks are left with no other choice but to absorb the costs due to higher deposit cover. 

Conclusion

It would be interesting to see how banks will cope up with this situation and what necessary steps will take to come out from this hit. 

Latest Updates

RBI Punishes HDFC Bank for 1 Crore Over KYC Norms Violation

The Reserve Bank of India (RBI) has penalized Rs.1 crore penalty on HDFC for violating know-your-customer(KYC) norms in 39 accounts. The Central Bank said that those 39 current accounts opened by HDFC had transactions disproportionate to the declared income and profile of the customers.     

“Based on the observations made during the on-site inspection for FY17, scrutiny of 39 current accounts opened by its customers for bidding in the initial public offer was conducted by the RBI, which revealed that the bank had failed to exercise ongoing due diligence in those accounts,” the central bank said.

As a result, the RBI had issued a show cause notice to HDFC Bank, asking the bank why they should not be penalized for this lapse on their part. And, after taking into consideration the bank’s response, the Reserve Bank of India concluded that the charge of non-compliance with the direction was sustained and warranted imposition of monetary policy. Thus, the RBI went ahead and imposed a fine of Rs.1 crore on HDFC Bank. Moreover, the latter was allowed to send its representative to make oral submission also, before pronouncing the verdict. 

However, the Central Bank of India clears that finding HDFC Bank non-compliant in this particular case does not mean that the transactions held in those accounts are not valid. Any agreement or understanding the bank would have entered into with the 39 current account holders remains unaffected as well.

The objective behind imposing this fine is to ensure that banks do not take the KYC compliance lightly and also to stop the money laundering activities. Following the rules, in last year July also, the RBI had fined a list of public sector banks for KYC norms violation. 

GST, Latest Updates

GST Collection Target Resets at 10,000Cr By Govt.

Highlights:

  • The Government on Friday has increased the GST collection targets for the month of January and February by Rs.1.15 lakh crore, from the earlier Rs.1.1 lakh crore.
  • No change for the March target, standing at Rs.1.25 lakh crore.
  • The Government targets to collect Rs.10,000 crore, more than what was targeted earlier.
  • GST Authorities will look into fraudulent Input Tax Credit (ITC) claims as found in data analytics review.
  • SMSs and emails will be sent to such fraudulent or excess ITC defaulters, non-filters and those who provide mismatched information in their return or over- invoice or who have been identified through data analytic for tax evasion by duping the system rogue modus operandi.
  • Taxpayers who have taken ITC wrongfully can voluntarily repay the amount equal to inadmissible credit before the verification process begins and needs to bear disciplinary action.
  • Identified targeted taxpayers and fraudulent refund seekers, and over-invoice users will have to go electronic communications, followed by visits from GST field formation that would be required to report on a daily basis. 
  • GST Department will aggressively use the data analytics features of the GSTN system. 
  • The department is looking to increase its collection efforts in the next 2-3 months via advanced tracking measures to keep an eye on GST evaders.

Just a few weeks ahead of the Budget 2020, the Finance Ministry has come out with the latest update on GST collection. The Government on Friday has increased the GST collection targets for the month of January and February by Rs.1.15 lakh crore, from the earlier Rs.1.1 lakh crore. According to sources in the Finance Ministry, the collection aim for the next two months(January and February) is Rs.1.15 lakh crore and for the last month of the financial year (March) is Rs.1.25 lakh crore, with no change for the March target. Well, which simply means the Government targets to collect Rs.10,000 crore, more than what was targeted earlier.

The decision to revise the target was taken at a high-level meeting convened by the Department of Revenue, under the Finance Ministry, specific focus on fraudulent Input Tax Credit (ITC) claims as found in data analytics review of all the refund under inverted duty structure,etc.

Yes, the GST authorities will look into the mismatched supply and purchase invoices, failure of filing returns, and over-invoicing,among other things. Moreover, the concerned authorities would also look at fake or excess refunds availed beyond the permissible limits, plugging tax leakages, fake or huge ITC claims, and data analytics of mismatch in return forms such as GSTR-1, GSTR-2A, and GSTR-3B respectively.   

Disciplinary Actions Against Frauds and Defaulters:

The government sources said that SMSs and emails will be sent to such fraudulent or excess ITC defaulters, non-filters and those who provide mismatched information in their return or over- invoice or who have been identified through data analytic for tax evasion by duping the system rogue modus operandi. Also, taxpayers who have taken ITC wrongfully can voluntarily repay the amount equal to inadmissible credit before the verification process begins and needs to bear punitive action.   

Moreover, such identified targeted taxpayers and fraudulent refund seekers, and over-invoice users will have to go electronic communications, followed by visits from GST field formation. The aim is to make them obey the law and pay due taxes in a timely manner. However, the field formations would be required to report on a daily basis.    

Action Plan:

In addition to this, the GST Department has been given instructions to aggressively use the data analytics features of the GSTN system. The department is looking to increase its collection efforts in the next 2-3 months with the help of advanced tracking measures to keep an eye on GST evaders. Also, the apex body will strategize an action plan and make the field functions more efficient to achieve collection targets without any overreach.  

What’s Good:

However, on the Fiscal Deficit front, the same has already exceeded budget estimation of over Rs.7 lakh crore, giving a big relief to the Finance Minister Nirmala Sitharaman. But due to lower than expected revenue from tax as well as from disinvestment, the deficit is expected to widen further by at least 20 basis points for the existing fiscal year to 3.5% of the GDP.

Credit Card, Latest Updates

New Credit and Debit Cards Rules to Prevent Cyber Frauds by RBI

Must Read:

  • RBI directs banks and other card issuers to only allow domestic card transactions at ATMs and Point of Sale(PoS) terminals in India at the time of issuance/re-issuance of a card.
  • For international transactions, online transactions, card-not-present transactions, and contactless transactions, the customers need to separately set up services on their card/s.
  • New credit or debit card is issued it will, by default, only be used to physically swipe at an ATM or a PoS.
  • Existing card users can enable/disable their cards for various transactions. Also, they can modify the transaction limit(set/reset), within the overall card limit for all kinds of transactions.
  • The above facility should be provided 24×7 through numerous channels such as mobile application, internet banking, ATMs, Interactive Voice Response(IVR).
  •  For prepaid gift cards and cards being used at mass transit systems. 
  • Also, Existing cards, which have never been used for online transactions, should be mandatorily disabled to ensure security, the RBI notification said.

The Reserve Bank of India(RBI) has come out with new credit and debit cards norms, directing all banks to only allow domestic card transactions at ATMs and Point of Sale(PoS) terminals in India at the time of issuance/re-issuance of a card. To do international transactions, online transactions, card-not-present transactions, and contactless transactions, the customers need to separately set up services on their card/s. These rules will be applicable for new credit and debit cards, coming into effect from 16 March 2020. Well, which means when a new credit or debit is issued it will, by default, only be used to physically swipe at an ATM or a PoS. And, it will not be enabled for online and contactless transactions.

Issuers shall provide cardholders a facility for enabling card not present (domestic and international) transactions, card present (international) transactions and contactless transactions,” the RBI notification read.

In the case of existing card users, RBI had directed the banks to give users an authority to enable/disable their cards for various uses. Here, cardholders can also modify the transaction limit(set/reset), within the overall card limit for all kinds of transactions. Yes, the present credit and debit card users in India can switch on and switch off their cards at any point based on their usage and convenience. And, a user can also decide whether to disable any of the features or not. RBI further said that for existing cards, issuers can make a decision based on their risk appetite whether to disable the card not present (domestic and international) for transactions. 

Moreover,  the above facility should be provided 24×7 through numerous channels such as mobile application, internet banking, ATMs, Interactive Voice Response(IVR) and can be offered at branches and offices. The Central Bank also made it mandatory to send alerts/information/status through SMS or email for all such transactions or status changes in the card.   

However, this new provision is not mandatory for prepaid gift cards and cards being used at mass transit systems. Also, Existing cards, which have never been used for online transactions, should be mandatorily disabled to ensure security, the RBI added. 

This latest update of the RBI on credit and debit cards will help in reducing the volume of cyber crimes and improve security.

Latest Updates

RBI Puts Restriction on Cash Withdrawals Up to Rs.35,000 for SGRSBN

Highlights:

  • RBI restricts cash withdrawals from SGRSBN ( Sri Gururaghavendra Sahakara Bank Niyamitha)Bank.
  • The maximum cash withdrawal limit stands at Rs 35,000 for the next 6 months.
  • As per RBI’s notice, (SGRSBN) bank will be unable to grant or renew loans and advances, make any investment or incur any liability, including borrowing of funds and acceptance of fresh deposits from the close of business on January 10,2020. 

The Reserve Bank of India (RBI) has imposed severe curbs on cash withdrawals from Sri Guru Raghvendra Sahakara Bank Niyamitha in Bangalore. The account holders can only withdraw up to Rs.35,000 from their account for the next 6 months. In RBI’s notice, (SGRSBN) bank will be unable to grant or renew loans and advances, make any investment or incur any liability, including borrowing of funds and acceptance of fresh deposits from the close of business on January 10,2020. 

In its notice issued under the provisions of section 35A of the Banking Regulation Act, 1949, the RBI has said, “As from the close of business on January 10, 2020 (Friday), the bank shall not, without prior approval of the RBI in writing, grant or renew any loans and advances, make any investment, incur any liability.”In particular, a sum not exceeding Rs 35,000 of the total balance in every savings bank or current account or any other deposit account may be allowed to be withdrawn subject to conditions.”

The (SGRSBN) bank has also been stopped from disbursing any payment whether in the discharge of its liabilities and obligations or otherwise, enter into any compromise or arrangement and sell, transfer or otherwise dispose of any of its properties or assets. The bank, however, will continue to undertake banking business with certain restrictions imposed by RBI untill its final position improves.   

This news has created panic among more than 9,000 depositors of (SGRSBN) bank, seeking answers to withdraw their life savings. Sri Guru Raghavendra Sahakara Bank is an Urban Cooperative bank that has been operational since 1997. The bank has 10 branches in the Karnataka capital and has blamed 62 loans that have locked up Rs 300 crore of deposit. 
The RBI had earlier issued written directions to (SGRSBN) bank on January 2, 2020.  According to the Central Bank, the directions shall remain in force for a period of six months from the close of business and are subject to review.

Latest Updates

RBI Nods to SIP Payments Through UPI

Highlights:

  • RBI approves SIP Payments through UPI.
  • The limit for every e-mandate based recurring transaction without Additional Factor Authentication(such as OTP) is Rs.2,000.
  • The same transaction limit is also applicable to a SIP up to Rs.2,000, registered via UPI.
  • For changing the SIP amount or cancelling the same, an additional factor authentication will be needed.
  • The experts have criticized the limit of Rs.2,000 for SIP registration and said the monetary limit will have to be increased and it should have a faster processing time. 
  • As of December 2019, the mutual fund industry had 2.97 crore active SIP accounts out of India’s population of 135 crores, contributing Rs.8,518 crore.
  • As per the National Payments Corporation of India (NPCI) at present, UPI has around 10 core active users and the numbers will increase to 50 crores in the next 3 years. 

The Reserve Bank of India (RBI) has allowed SIP (Systematic Investment Plan) to be registered via UPI(Unified Payments Interface). In a notification on 10 January 2020, RBI permits the processing of electronic mandate on recurring transactions via UPI. The notification also stated the RBI permission for recurring payments without additional authentication (such as OTP) given to credit cards, debit cards and digital wallets on 21st August 2019 up to Rs.2,000 per transaction. 

Moreover, the same transaction limit is also applicable to a SIP up to Rs.2,000, registered via UPI. However, in the case of changing the SIP amount or cancelling the same, an additional factor authentication will be needed. However, the lump sum investments in mutual funds were already allowed through UPI. 

With a vision to promote digital payments, the central bank has taken this significant step which will result in the rapid growth of retail digital payments in the country. 

In case of mutual funds, the customer will now be able to sign up and pay for products like SIP mutual funds and insurance premiums that involve recurring payments with UPI.    

As of December 2019, the mutual fund industry had 2.97 crore active SIP accounts out of India’s population of 135 crore, contributing Rs.8,518 crore. Well, this implies an average SIP ticket size of Rs.2,861. However, the experts have criticized the limit of Rs.2,000 for SIP registration by saying that the monetary limit will have to be increased and it should have a faster processing time. 

With this initiative, UPI can open the mutual fund market to the customers who do not use Net Banking but are aware of widely known UPI Apps like BHIM and GooglePay. A customer can register multiple SIPs of Rs.2,000 over different days. If National Payments Corporation of India (NPCI) is to be believed, at present UPI has around 10 core active users in its kitty and the number will increase to 50 crore in the next 3 years. 

What’s New:

Under this new facility, the UPI users will be able to bypass Additional Factor Authentication(AFA), required for each payment to a regular merchant. Thus, UPI users can now easily make regular payments by giving one-time instruction to UPI service providers. 

Transaction Limit:   

As per RBI, the limit for every e-mandate based recurring transaction without Additional Factor Authentication(AFA) is Rs.2,000. However, the transactions above this limit  are also subject to AFA. No charge will be applicable on such transactions,where users are availing e-mandate facilities. 

Latest Updates

Aadhaar Based Video e-KYC Launched by RBI

Must Read:

  • RBI introduces Video-based Aadhaar e-KYC for onboarding customers.
  • An official will capture the live photo of a customer and identity the same via Aadhaar or PAN along with a series of questions.
  • The customer needs to be physically present within the country for geo-tagging.
  • The source of the video call must be from the domain of the concerned bank/lender, not from a third-party source. 
  • RBI’s master direction did not mention what application can be used for e-KYC Video chat.
  • The notification states that the video interaction can only be triggered from the domain of the lender and should be done in a safe and secure manner. 

The Reserve Bank of India on Thursday introduced e-KYC norms, allowing banks and other financial institutes regulated by it to use a Video-based identification process for onboarding the customers. The process of video-based KYC(Know Your Customer) will be verified by Aadhaar to establish a customer’s identity. This step of RBI will save cost and time and will give a big relief to map remote customer identification, unlike physical onboarding. However, this video-based KYC permit will give a boost to digital financial services, especially non-bank lenders (NBFCs) and Fintech firms, who miss a widespread geographical presence.  

“…with a view to leverage the digital channels for Customer Identification Process (CIP) by Regulated Entities (REs), the RBI has decided to permit Video-based Customer Identification Process (VCIP) as a consent-based alternate method of establishing the customer’s identity, for customer onboarding,” the RBI notified on Thursday. 

In a bid to ease the physical data handling process, the Video KYC provision was introduced by UK Sinha, former chairman of the Securities and Exchange Board of India (Sebi) in June last year. 

How the Process Works

  • The Video KYC can be done by capturing a live photo of the customer.
  • An official will capture the live photo of a customer and identity the same via PAN or Aadhaar along with a series of questions. 
  • The agent also needs to make sure that the customer needs to be physically present within the country by capturing his geo-coordinates. 
  • The documents can either be uploaded or captured by a video. In the case of a video chat, the customer needs to show the required documents live. 
  • The source of the video call must be from the domain of the concerned bank/lender, not from a third-party source. 
  • The primary of verification would be Aadhaar but PAN or any other documents, showing business and financial status are also allowed.
  • The documents will be uploaded on to the government’s ‘Digi-Locker’ Facility, and can also be accepted by the lenders in the case of new customer on-boarding. 

However, RBI’s master direction did not mention what application can be used for e-KYC Video chat but the notification states that the video interaction can only be triggered from the domain of the lender. Also, customer data has to be stored in a safe and secure manner. 

Latest Updates

A New Year Gift to Home Loan Buyers as SBI Lowers External Benchmark By 25 bps

To spread the New Year’s cheer, State Bank of India (SBI) has reduced its external benchmark rate by 25 basis points, making it 7.80% from 8.05%. This new rate change will be effective from January 1, 2020, and will be a treat for home loan buyers, further reducing their EMI burden. 

“The external benchmarks are RBI’s Repo Rate, Treasury Bill Yield (91-day T-bill Yield) and (182-day T-bill Yield) of Government of India and any Other Benchmark Market Interest Rate.”

According to SBI’s press release”With this reduction, the interest rate for existing home loan customers as well as MSME (micro, small and medium enterprises) borrowers who have availed loans linked to external benchmark based rate would come down by 25 bps.”

With this new rate cut coming into effect, the new home loan buyers would be able to avail a loan at an interest rate starting from 7.90% per annum as compared to an earlier interest rate of 8.15% per annum. 

Currently, SBI’s external benchmark lending rate is 5.15% plus 265 basis points, which is linked to RBI’s Repo Rate. Till now, RBI has reduced its repo rate by 135 bps, while banks have only provided the benefit of 44bps with regards to new loans. 

Being country’s largest lender, SBI came first in the league to cut the external benchmark rates, after the Reserve Bank of India (RBI) maintained the status quo in its December’s Monetary Policy, making home loans affordable. 

Though RBI has instructed all banks to adopt the new external benchmark based rate structure so that the benefits of its Monetary Policy will easily be passed on to the customers. 

So, unwrap your New Year’s gift of pocket-friendly home loan EMIs offered by SBI.

A Sneak Peek on Benchmark Lending System

Background

When it comes to loans, earlier banks used to lend money linked to the Marginal Cost of Funds based Lending Rate(MCLR), also known as internal benchmarking. Every bank has its own internal benchmark rate, which depends on various factors like-fixed deposit rates, source of funds and savings rate. When a customer asks for a loan, here the power lies in a bank’s hand to give away the loan on an MCLR, including the spread (bank’s own profit). 

The Problem with MCLR-based Lending System

In the case of the MCLR system, the biggest hurdle was the lack of transparency and transmission of policy rates. When RBI changes its repo rate, there is no guarantee that a borrower would be able to reap its benefits. That’s Right! MCLR, being an internal benchmarking system, here, the bank will decide the loan price, rate cuts, which often don’t reach out to the borrowers. Depending upon a bank’s individual profit and performance in terms of business, it used to have an authority to lend loans based on its own terms. 

How the New External Benchmark System Will Work

Under the new benchmarking system, which came into effect from October 1, 2019, any personal, housing or auto loan taken from a bank will be linked to an external benchmark instead of MCLR as per Reserve Bank of India. A statement issued by RBI also stated that the banks can set the interest rate of the loans to any of the following external benchmarks:

  1. RBI’s Repo Rate
  2. Government of India three-months Treasury Bill Yield (91-day T-bill Yield)
  3. Government of India Six-months Treasury Bill Yield (182-day T-bill Yield)
  4. Any Other Benchmark Market Interest Rate

What Does External Benchmark Mean for You?-The Benefits It Has

With a major change in the way banks used to lend, it would be interesting to see how the linking of interest rates to any of these external benchmarks on different categories of loans would be beneficial for the customers. 

With these benchmarks, banks are also allowed to decide their spread value, which will be fixed for the tenure of the loan. However, a bank can change it, based on the eligibility (credit score of a borrower). 

It is expected that this external benchmarking system will bring a big smile on the faces of loan borrowers, allowing them to enjoy lower interest rates, leading to pocket-friendly EMIs.

Latest Updates, Loans

SBI Announces to Launch-OTP Based ATM Cash Withdrawals from January 1, 2020

Points to Ponder:

  • The OTP facility will be active across all SBI ATMs with effect from January 1, 2020, between 8 pm and 8 am.
  • OTP authentication will be applicable for cash withdrawals above Rs.10,000 in the late evening. 
  • A customer must have a registered Mobile Number with SBI to get an OTP alert.

In a bid to increase security and to prevent ATM-related frauds, State Bank of India(SBI) will introduce a one-time password-based cash withdrawal system in its ATMs. This facility will be available from January 1, 2020 for all SBI customers, only for the transactions above Rs.10,000 between 8 pm and 8 am.

“The OTP is a system-generated numeric string of characters that authenticates the user for a single transaction. This additional factor of authentication will protect State Bank cardholders from unauthorized ATM cash withdrawals”. 

This OTP-based cash withdrawal facility, will add another layer of security in the portfolio of all SBI customers and keep them protected from tricksters.  

The bank said this new feature will not require any major change in the present process to withdraw cash from its ATMs. However, this facility will not be applicable, if an SBI cardholder uses another bank’s ATM to withdraw cash.

“This will safeguard the customers against the risk of unauthorized transactions on account of skimmed /cloned cards, while withdrawing cash at SBI ATMs,” the bank’s Facebook post stated.

How The Process Works:

  • The process begins when a cardholder enters the amount, he/she wishes to withdraw 
  • An OTP Window will appear on an ATM screen
  • The customer has to enter the OTP received on the registered mobile number to get the cash from the ATM  

Things You Must Know-About SBI’s OTP Based ATM Cash Withdrawal:

  • This facility will be active across all SBI ATMs with effect from January 1, 2020, between 8 pm and 8 am
  • OTP authentication will be applicable for cash withdrawals above Rs.10,000 in the late evening. 
  • A customer must have a registered Mobile Number with SBI to get an OTP alert.
  • Make sure to carry your mobile phone along while withdrawing cash from SBI ATM.
  • If SBI customers withdraw money from another bank’s ATM, then OTP will not be required.
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