8 Updates That Will Impact Your Finances Starting June 2022

Last Updated on Jun 13, 2022 by Aradhana Gotur

Higher interest rates on home loans, inflated premiums on third-party motor premiums, and additional charges on credit card EMI purchases – eight updates that will impact your finances beginning June 2022.

The month of June so far has seen several key regulatory and operational changes that would impact your finances hereafter. Here we detail eight of them.

1. EMIs on SBI home loans increase

Following RBI’s 40 basis point (bps) hike in the repo rate in the first week of May, SBI has increased its home loan interest rates. Effective 1 June 2022, SBI’s external benchmark lending rate (EBLR) on home loans increased to 7.05% from 6.65%, and repo-linked lending rate (RLLR) rose to 6.65% from 6.25%. The bank adds a credit risk premium over these rates while approving home loans.

2. Premium on third-party motor insurance become costlier

In a first, the Ministry of Road Transport and Highways (MoRTH) notified third-party rates in consultation with the Insurance Regulatory and Development Authority of India (IRDAI). Following this, third-party motor insurance premiums on cars and two-wheelers increased from 1 June.

The third-party rate for a private car having an engine capacity of less than 1,000 cc is increased by Rs 22 to Rs 2,094. The rate for a car with an engine capacity from 1,000 cc to 1,500 cc has risen by over 6% to Rs 3,416.

For a bike with an engine capacity of less than 75 cc, the new premium is Rs 538, increased by 11%. For bikes with an engine capacity from 150 cc to 350 cc, the premium is increased from Rs 1,193 to Rs 1,366.

3. Credit card EMI purchases attract processing fees

Users of American Express credit cards will now have to pay additional charges to convert a purchase into EMIs. The point-of-sale EMI transactions now attract a processing fee of Rs 99 plus taxes. These processing charges apply to online or in-person transactions. Additionally, a time processing fee of 2% plus taxes continues to be charged on post-purchase EMI requests. Large purchases converted into EMIs attract an interest rate of 14% p.a.

4. Interest rates hiked on savings account of Union Bank of India

Union Bank of India savings account maintaining a balance of up to Rs 50 lakh will earn an interest of 2.75% p.a. Accounts with balances from Rs 50 lakh to Rs 100 cr. earn interest at 2.90%. Interest rates range from 3.1% to 3.55% for higher slabs. Earlier, the bank offered a flat interest rate of 2.90% for all savings account holders.

5. Minimum balance requirement increased by Axis Bank

Axis Bank now requires account holders to maintain a higher average monthly balance. The minimum balance in semi-urban and rural areas is increased to Rs 25,000 from Rs 15,000 or Rs 1 lakh term deposit. For the holders of liberty savings accounts, the minimum balance requirement is increased from Rs 15,000 to Rs 25,000 or debit card spends of Rs 25,000.

6. Second phase of gold hallmarking

Once the second phase of hallmarking kicks in, jewellers are mandated only to sell hallmarked jewellery and artefacts. Previously, only 14K, 18K, and 22K jewellery were hallmarked. Additional testing laboratories have been added to more districts on this front. As of now, hallmarking is mandatory for registered jewellers in about 288 districts. However, Polki, Jadau, and Kundan necklaces are exempt from the hallmarking requirement.

7. Charges on India Post Payments Bank transactions

India Post Payments Bank will introduce charges for Aadhaar Enabled Payments (AePS) effective 15 June. The first three AePS transactions, including cash withdrawals, deposits and mini-statements, will be free every month. While subsequent withdrawals or deposits will cost Rs 20 plus GST, every mini-statement request will attract Rs 5 plus GST.

8. Double penalty for failure to link PAN with Aadhaar

Central Board of Direct Taxes (CBT) has imposed a fine for those who missed the March deadline of linking their PAN with Aadhaar. Individuals who do not link PAN and Aadhaar by 30 June 2022 will attract a penalty of Rs 500. Thereafter, the charges will be increased to Rs 1,000.

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Aradhana Gotur

Senior Content Writer at Tickertape

Aradhana Gotur is a Content Writer with 4 years of experience in personal finance, stock markets, and lifestyle areas. Having recognised the power of words, she constantly works on using them to enhance financial awareness among the masses and meet business objectives. One of her greatest strengths is breaking complex concepts in an easy-to-understand way.

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