6 changes that will affect your financial life in June

The Reserve Bank of India (RBI) has announced an increase in the repo rate resulting in a spike in the interest rates for home and auto loans. While some banks had immediately increased the interest rates, others will do so from June. Additionally, the processing fee levied for EMI purchases using credit cards is also set to rise. Here are the key financial changes that will affect your life in June:

1. Increase in SBI home loan interest rates: Due to the 40-point basis repo rate hike in May, SBI has decided to increase the External Benchmark Lending Rate (EBLR) to 7.05% from 6.25% and Repo-Linked Lending Rate (RPLL) to 6.65% from 6.25%. The rise in EBLR and RPLL will affect consumers applying for a home loan.
2. Increase in third-party motor insurance premium: As per the Ministry of Road Transport and Highways and Insurance Regulatory and Development Authority of India, two-wheeler and four-wheeler owners will have to pay higher third-party motor insurance premium from June 1st. For a four-wheeler with an engine capacity of less than 1000 cc, the insurance premium now stands at Rs 2094, up by Rs 22. For four-wheelers with an engine capacity between 1000 cc and 1500 cc, the insurance premium has increased by 6% to Rs 3416. For two-wheelers, namely motorcycles, if the engine capacity is less than 75 cc, the insurance premium to be paid is Rs 538, up by 11%. For motorcycles with an engine capacity of 150 cc to 350 cc, the insurance premium is now Rs 1366, an increase of Rs 173.
3. Increase in processing fee levied for EMI purchases using credit cards: If you are an American Express credit card holder, the processing fee levied for an EMI purchase online or in-person will include an additional charge of Rs 99 plus taxes. For those who want to convert their purchases into an EMI scheme at a later date, the company will charge a time processing fee of 2% plus taxes. Additionally, an interest rate of 14% will be levied by American Express for converting large purchases into EMI.
4. Change in interest rates earned for Union Bank of India savings account holders: A Union Bank account holder who has a balance of up to Rs 50 Lakh in their account will receive an interest rate of 2.75%. For those who have a balance of Rs 50 Lakh to Rs 100 crore, the interest rate earned will be 2.90%. For higher slabs, the interest rate earned will increase from 3.1% to 3.55%. Earlier, Union Bank account holders earned an interest rate of 2.90% for all slabs.
5. Increase in minimum balance for Axis Bank account holders: Axis Bank has increased the minimum required balance for its account holders from Rs 15000 to Rs 25000. Additionally, for liberty account holders, the minimum required balance in the account has been increased from Rs 15000 to Rs 25000.
6. Increase in penalty for failure to link PAN with Aadhar: The Central Board of Direct Taxes has inflicted a fine for those who have not linked their PAN with Aadhar by the end of March. The fine levied until June 30 is Rs 500 and Rs 1000 thereafter.

For any clarifications/feedback on the topic, please contact the writer at cleyon.dsouza@clear.in