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National Pension System, bank lockers, credit card rewards, insurance policies, mutual funds: 5 key changes in money rules from Jan 1

The New Year 2023 will see a number of significant changes in the personal finance sector. These changes would include revised bank locker agreements, credit card reward points, KYC processes for insurance policies, and mutual fund schemes, among others. All of these changes will become effective on January 1, 2023.  

Here’s a close look at the changes: 

1.    National Pension System 

From January 1, all central government employees will have to submit their withdrawal requests as applications for partial withdrawal through their associated nodal offices. The nodal agency for pension, Pension Fund Regulatory and Development Authority (PFRDA), has said that from now on, subscribers will have to submit supporting documents to nodal officers to substantiate the reasons for partial withdrawal.  

The PFRDA said: “With the abating of the pandemic-related difficulties and relaxation of lockdown restrictions, the issue examined after taking into consideration of the prevalent practices, circumstances, and law, it has been decided to make it mandatory for all the Government sector subscribers (Central/ State Govt & Central/State Autonomous Bodies) to submit their requests through their associated nodal offices.” 

The National Pension System allows subscribers to withdraw before maturity or prematurely only after the completion of three years. The withdrawal amount cannot exceed 25 per cent of the total contributions. 

Withdrawal is allowed only for specified reasons, like higher education of children, the marriage of children, the purchase/construction of a residential house (in specified conditions), and for treatment of critical illnesses. 

The subscribers can make partial withdrawals thrice during the entire tenure of subscription under NPS. 

2.    New bank locker rules from January 1 

The Reserve Bank of India has said that all leading banks should issue the locker agreement to its holders before January 1, 2023, as the new locker rules will be implemented from that date. The central bank said all banks need to circulate a new locker agreement to their safe deposit locker holders under the new rules. Banks can use the IBA-drafted model locker agreement, which should comply with the updated instructions and Supreme Court’s directives. The new rule was adopted on January 1, 2022, for new locker facilities. But all existing customers will have to complete the updation process by January 1, 2023. 

As per RBI’s revised guidelines, “Banks shall ensure that any unfair terms or conditions are not incorporated in their locker agreements. Further, the terms of the contract shall not be more onerous than required in the ordinary course of business to safeguard the interests of the bank. Banks shall renew their locker agreements with existing locker customers by January 1, 2023”. 

3.    Credit card rules 

State Bank of India Cards & Payment Services has tweaked two of its rules about the redemption of vouchers and Reward Points that are effective from January 2023. The SBI-backed card will have new rules regarding Reward Points on online spends on with SimplyCLICK/SimplyCLICK from January 1. Users will get 5X Reward Points instead of 10X Reward Points on online spends on  

“Accrual of 10X Reward Points on online spends at with SimplyCLICK/SimplyCLICK Advantage SBI Card will be revised to 5X Reward Points w.e.f 01 Jan’23. But the card will continue to accrue 10X Reward Points on online spends at Apollo 24X7, BookMyShow, Cleartrip, EazyDiner, Lenskart & Netmeds.” 

Another rule is for Cleartrip vouchers. “From 6 Jan 2023, the Cleartrip voucher issued to SimplyCLICK Cardholders on reaching the online spend milestone should be redeemed in a single transaction only and cannot be clubbed with any other offer or voucher. For more details,” SBI Cards & Payment Services said on its website. 

HDFC credit card rules 

HDFC credit card reward points for flights and hotel bookings will be capped per calendar month on the HDFC Bank SmartBuy online portal. The limit has been set at 150,000 reward points for Infinia, 75,000 reward points for Diners Black, and 50,000 reward points for all other cards, the bank said in a notification. 

Similarly, reward points earned on grocery transactions will be also capped. Like it will be 2,000 reward points for Infinia, Diners Black, Regalia, Regalia Gold, Regalia First, Business Regalia, Business Regalia First, Diners Privilege, Diners Premium, Diners Clubmiles, and Tata Neu Infinity cards.  

For the rest, the cap has been set at 1,000 reward points. 

4.    KYC mandatory for insurance policies 

The Insurance Regulatory and Development Authority of India (IRDAI) has said that all insurance policyholders will have to submit KYC (know your customer) details before signing in for new policies. The insurer has said it will closely monitor KYC documents from the policyholders before selling the policies, including life, health, motor, home, and travel insurance policies. 

5.    Passbook copies not accepted for mutual fund schemes 

As per SEBI Mutual Fund Regulations, it is mandatory for mutual fund investors to provide their bank account details in the application they submit before purchasing mutual fund units. The applications will be rejected if a bank statement or passbook copy is submitted as proof of address for completing the KYC process. For Hindu-undivided family (HUF) entities, bank statements, however, can be accepted for completing the KYC process. 

Investors may provide a passport, voter ID, driving licence, NREGA job card, National Population Register letter, and proof of possession of an Aadhaar card as proof of KYC details along with other permissible documents. 

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