Several of your key money matters are set for a reset from today. Here are some key regulatory and operational changes that are likely to affect your financial life.
Automated payments on cards for monthly subscriptions may not work
From October 1, all recurring transactions above Rs 5,000 on debit or credit cards and other prepaid instruments will require an additional factor of authentication (AFA). For subsequent automated debits above Rs 5,000, the bank would have to send a notification at least 24 hours in advance.
The notification will contain all information regarding the upcoming debit. It would also give you the option to opt out or pay the amount. All standing instructions set up on your card (both domestic and international) will not be processed, without the AFA. If the recurring amount is less than Rs 5,000, then the merchant will automatically charge even without AFA on your card. But you still need to re-register all the cards once, irrespective of the amount you pay.
“This new RBI framework for recurring auto payment through cards puts greater power in the hands of the customers as they will now have more control over the payments,” says Adhil Shetty, CEO of BankBazaar.com. Experts recommend updating your mobile number in the bank records, as banks send OTPs on the registered mobile number.
There are alternatives. You could make a payment every month on the merchant’s site manually using your debit or credit card. The other option is to use the net banking facility to set up auto-pay instructions for utility bills and other services that require recurring payments, directly from the savings bank or current account.
Also read: RBI norms on credit and debit cards e-mandates kick in today. Here's what you must know
Old cheque books of three government banks will be invalid
Customers of Allahabad Bank, Oriental Bank of Commerce (OBC) and United Bank of India are advised to apply for a new cheque book as their existing cheque book will become invalid from October 1. In April 2020, OBC and United Bank of India were merged with Punjab National Bank (PNB).
To avoid any transactional inconvenience, OBC and United Bank of India customers need to apply for new cheque books from PNB. Similarly, Allahabad Bank has been merged with Indian Bank. So, the customers of Allahabad Bank should apply for a new cheque book from Indian Bank. You can apply for a new cheque book through net or mobile banking, ATM or via your bank branch.
Also read: Bank mergers: Here are the procedural changes customers must be aware of
Investment rule changes for employees at fund houses
According to SEBI notifications, from October 1, the skin-in-the-game rules will be applied in a phased manner for junior employees of fund houses. They need to invest 10 per cent of their compensation in mutual fund units of the house.
From October 1, 2022, this will be increased to 15 percent and from October 1, 2023, it will be raised to 20 percent of the compensation amount.
For these regulations, SEBI has defined junior employees as those below 35 years of age, and are not heads of any departments. This relaxation is not applicable to the CEO or fund manager. For such employees, 20 percent of their salaries will be invested in mutual fund units from October 1, 2021, and be locked in for three years.
Pensioners: Submit your digital life certificate
Government pensioners submit life certificates every year to the concerned authorities.
In order to submit this life certificate, the individual drawing the pension needs to present herself before the disbursing agency. Or, she can have the life certificate issued by the authority where she served earlier and have it delivered to the disbursing agency. The requirement of personally being present in front of the disbursing agency or getting a life certificate often becomes a hurdle in the process of seamless transfer of pension.
From October 1, pensioners above the age of 80 must submit their digital life certificate at the Jeevan Pramaan Centre of the respective head post offices in the country. It is a biometric enabled digital service for pensioners. The last date to complete this is November 30. If you do not submit the digital life certificate, then your pension will not get credited to your account.