- Date : 02/12/2022
- Read: 3 mins
Changes in the banking sector in December
While December is the last month of the year, it is also the month wherein major changes are occurring in the banking ecosystem. These changes will have far-reaching impacts on consumers as they become instrumental. So, let’s look at the major changes happening and how they will impact you and your finances.
The launch of the Digital Rupee
In an announcement, the Reserve Bank of India (RBI) mentioned launching India’s first Digital Rupee on 1st December. A legal tender in the same denomination as the present currency, the e-rupee is being launched as a pilot program with a select few banks and in a select few cities.
Slowly, as the pilot is successfully tested, the Digital Rupee will be rolled out in other cities of India and will soon become operational pan-India.
The e-rupee will be distributed through participating banks and can be used for online transactions and bank transfers.
Is a possible rate hike on the horizon?
RBI will be announcing its monetary policy on 7th December. The Monetary Policy Committee (MPC) has long since been trying to control inflation but to no avail. It hiked the repo rate to bring inflation under control. However, as inflation is not reducing, it is expected that the committee might hike the repo rates further.
If the repo rates are hiked, loans will get expensive as banks will also hike their interest rates.
Credit card Minimum Amount Due (MAD)
In October, the regulator asked banks to calculate the credit card MAD, so cardholders do not feel a pocket pinch. New rules were issued, and now, banks compute the MAD so that the dues can be paid over an affordable tenure.
Major banks are changing the MAD requirement accordingly. HSBC has changed its MAD calculation from 1st December. Now, the MAD will be calculated as 5% of the outstanding amount + higher of previous dues or over limit fee.
The previous due will be calculated as the aggregate MAD missed plus the interest charged thereon.
No balance alert notifications on SMS
Starting December, Yes Bank will discontinue the balance alert SMS sent on a subscription basis. This is being done to minimise fraud and data theft.
If you are a customer and want to continue receiving SMS alerts, you can opt for them through the bank’s portal and also customise the messages that you would like to receive.
These changes are all set to affect the banking ecosystem significantly. Know these changes and understand what impact they might have on your finances.