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Whether you use credit and debit cards for your everyday transactions or invest in the national pension system and mutual funds, several key changes will take place in October that will affect your piggy bank.
Card Tokenization
The Reserve Bank of India (RBI) tokenization rule for credit and debit cards comes into effect on October 1. It prohibits all merchant sites from storing your card numbers, CVV, or expiration date on their server to process online transactions. Card users must either create a token before purchasing an item on the shopping site and store that token on the appropriate site (for future use), or generate a token and use it (for future use) at checkout to save.
However, the tokenization process for debit and credit cards is not required and customers can choose not to tokenize their cards on a merchant’s website. In this case, the customer must re-enter the card details for each transaction, including the 16-digit card number, expiration date, and Card Verification Value (CVV) when making purchases online.
With tokenization, the online shopping experience with credit and debit cards becomes more secure. The token hides your card details so that the fraudster cannot misuse the card in the event of a data leak on the merchant’s side.
New credit card rules
In April 2022, the RBI issued primary instructions for the issuance of credit and debit cards, effective October 1. Here are the brief details of the new credit card rules.
Card issuers are required to request OTP-based consent from the cardholder to activate a credit card if the customer has activated the card 30 days from the date of issuance. This rule is implemented for security reasons and to prevent abuse. Card issuers must also close the credit card account at no charge to the customer. In the case of a renewed or replaced card, blocking a deactivated card is subject to payment of the full amount due by the cardholder.
Card issuers must ensure that the approved credit limit communicated to the cardholder is not exceeded at any time without obtaining the express consent of the cardholder.
Updated NPS electronic nomination to be less cumbersome
Starting October 1, governments and corporations plan to simplify the electronic nomination process for subscribers to the National Pension System (SNP). Currently, your online requests for citation updates must be approved by the node offices or companies they work with. This approval requirement has led to a long backlog and thus a delay in the approval of applications.
Therefore, as of October 1, the Pension Funds Regulation and Development Authority (PFRDA) has decided that the nodal agencies will have the ability to accept or reject the electronic appointment request once the subscribing employee has submitted the electronic application. If the node office does not respond within 30 days, the appointment request change will be automatically accepted by the system. When updating the nomination, subscribers must also submit an online statement that the nomination will be considered void if it is determined not to comply with the PFRDA exclusion and withdrawal rules.
SEBI Rule for MF Subscribers: Provide Nominations or Opt Out of Coverage
The quote is an important element in any investment you make. The Securities and Exchange Board of India (SEBI), the regulator of financial markets, has also urged all mutual fund companies to take steps to ensure that the designation is made for all mutual fund investments.
Investors who subscribe to mutual fund shares on or after October 1, 2022, will have the option to submit their nomination or opt out of a nomination by submitting an application.
Investors can designate by completing a form and submitting it to fund houses or registrars and transfer agents. Investors wishing to withdraw from the nomination must do so by following the same process using the format provided. If the investor wishes to complete the process online, they can use an electronic signature or send the fund company a scanned copy of the corresponding signed form.
All existing mutual fund sheets, registered or jointly held, must have a nominee or an explicit opt-out statement.
Mutual fund folios without a nomination or opt-out statement will be frozen and investors will not be able to sell their shares in such folios.
Are you a taxpayer? You can no longer contribute to APY
Atal Pensión Yojana (APY), a scheme of the National Pension Regime, is mainly aimed at informal sector workers in low-income groups. Unlike NPS, which is a defined contribution plan, APY offers a predetermined pension – Rs 1,000 to Rs 5,000 per month – at age 60, depending on the subscriber’s age at enrollment and contribution during working years. . Although it is designed for low-income groups, so far others have also been able to contribute. But not anymore.
As of October 1, you will no longer be able to contribute if your income falls into the taxable category. Contributions made before this date may remain deductible under Section 80CCD(1) up to a total limit of Rs 1.5 lakh.
Fees for paying rent by credit card
ICICI Bank has introduced a 1% fee on credit card rental payments. The fee will be deducted from the rental payment as of October 20. So far, no such charge has been deducted from a bank’s credit card to pay the rent. Rent can be paid with credit cards on various third-party websites and apps, including RedGiraffe, Cred, Paytm, and Magicbricks. These fees are in addition to the 0.4% to 2% processing fees charged by these fintech websites and apps for paying your rent by credit card.