Finance-Related Changes That Come into Effect from January 2024

With the calendar changing to 2024, a few finance-related changes have come into effect or are in the process of becoming effective from January 1 onwards.

For example, small savings schemes will witness a rise in interest rates, insurance policy documents will be in a relatively simple format, dormant Unified Payments Interface (UPI) IDs will face deactivation, car prices will witness a spike, and the traditional physical verification for SIM cards will be eliminated gradually, among other.

Here’s the lowdown on some of these prominent changes that will come into effect in January 2024:

Raise in interest rates on small savings schemes: The Sukanya Samridhi Account Scheme (SSAS) will witness a 20 basis point (bps) spike to 8.2% for the January-March quarter. At the same time, the three-year time deposit interest rate has witnessed a 10 bps rise to 7.1% from January 1, 2024.

Disabling of inactive UPI IDs: The UPI accounts on prominent apps that remain unused for a year are facing deactivation from January 1, 2024, onwards. The step is initiated following a circular by the National Payments Corporation of India (NPCI)on November 7, 2023, which is directed towards tackling fraud by disabling UPI IDs, associated numbers, and phone numbers without transactions for a year. However, it is possible for users to re-register their apps for transactions and payments.

Simplification of health insurance policy documents: The Insurance and Regulatory Development Authority of India (IRDAI) has directed insurance companies (insurers) to release revised and simpler Customer Information Sheets (CIS) for health insurance policyholders, which has come into effect from January 1, 2024. The aim is to ensure that policyholders can easily comprehend policy features minus complex legal jargon.

Car prices set to rise: Several auto companies announced an imminent price rise in January 2024, directly related to escalated input costs. Buyers can expect a speculated spike of 2-3% on various car models. This would probably be higher in the case of specific models.

Verification for SIM cards in digital mode alone: The Department of Telecommunications (DoT) has directed telecommunication companies to discontinue physical verification when selling SIM cards, moving to a completely digital Know-Your-Customer (KYC) process, which is effective from January 1, 2024. A mobile user will only need to present their photo identity proof for digital verification. The idea is to reduce telcos’ acquisition costs and prevent SIM card fraud.

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