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Saturday, November 27, 2021

2020: How banking became easier for the customers, these changes helped

The year 2020 saw many changes. Most changes were caused by the coronavirus epidemic. Along with many other changes, in the past year, many major regulations related to banking were changed in the country. This made banking experience of common people better and simpler. Let us know how the banking system and the changes related to it in 2020 provided more convenience to the customers…

Bank deposits up to 5 lakhs now secured

If a bank goes bankrupt or defaults, then the amount of the first customers, including all deposits in a bank, up to Rs 1 lakh was safe. But in the budget 2020, this limit was increased to Rs 5 lakh. Deposit Insurance and Cray Dit Guarantee (DICGC) Corporation provides deposit insurance coverage on bank deposits. DICGC is a wholly owned subsidiary of the Reserve Bank of India. The new limit up to 5 lakh rupees is inclusive of all the deposits of a customer in all the branches of a bank like savings account, FD, RD etc.

Lone moratorium

Many people lost their jobs during the lockdown, many industries were shut down. In such a situation, many people who had taken loans from banks, a concern arose how to fill EMI in time. To relieve this concern, the RBI made available the option of Lone Moe Rhetorium in March. Its borrowers could postpone their EMI for three months but during this time they were not exempt from interest. The first loan moratorium was till the end of March but later it was extended till 31 August.

Unlimited ATM withdrawal facility for 3 months

In the month of March in the era of Coronavirus crisis, the government gave great relief to the general public, and provided the facility to charge no cash withdrawal from any bank ATM from any bank debit / ATM card for three months. A certain number of free cash withdrawals can be made from other banks’ ATMs. After that number is over, a charge has to be given on transaction. Apart from this, the government has also eliminated the need to keep minimum monthly balance in savings account for 3 months.

Bank brought COVID 19 special loan

The lockdown imposed due to coronavirus stalled many business. Small or medium business, many of the middle class people were in front of which the cash shortage crisis occurred. To overcome their problem, many banks brought COVID 19 special loans during the Corona period. These loans were launched on easy terms and low interest rate.

Merger of 10 banks

On 1 April 2020, 10 banks merged in the country, after which they were converted into four banks. Under this mega merger, Oriental Bank of Commerce and United Bank of India merged with Punjab National Bank (PNB), Syndicate Bank with Canara Bank, Andhra Bank and Corporation Bank with Union Bank of India and Allahabad Bank with Indian Bank .

Cash Withdrawal via OTP

In 2020, there was a big change in the rules for withdrawing money from ATMs. State Bank of India (SBI) and Punjab National Bank (PNB) implemented the One Time Password (OTP) based ATM withdrawal facility to reduce the unauthorized transactions occurring in ATMs. Due to this, SBI and PNB debit cardholders have to enter the OTP sent to the registered mobile number along with their debit card PIN, to withdraw the amount of Rs 10,000 or more from the ATM.

Special FD for Senior Citizen

Keeping in mind the coronavirus epidemic, some banks brought a special offer in May for the convenience of the elderly. Under this, FDs with a fixed maturity period was offered an additional interest of up to 0.50 per cent above the interest rate applicable to senior citizens. The banks which offered this include SBI, HDFC Bank, ICICI Bank and Bank of Baroda. SBI has extended this offer till 31 March 2021, while in the remaining three banks this facility is ending on 31 December 2020.

Video KYC

In the Corona era, some banks including HDFC Bank, IDFC First Bank started video KYC facility for customers. This ended the need to have KYC in the branch. Apart from this, insurance regulator IRDA also allowed insurance companies to do video KYC of customers.

Gold loaned and attractive

In 2020, the Reserve Bank of India allowed banks to give loans up to 90 percent on gold jewelery, making gold loans even more attractive. Earlier, loans were available only up to 75 percent of the total value of gold. This facility has been given till 31 March 2021.

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Additional debit / credit card related facilities

RBI asked all banks and other card issuing companies to allow customers to switch on / off the card for their debit or credit or virtual card. Also asked to provide the facility to set or modify the transaction limit for all types of domestic and international transactions on PoS / ATMs / online transactions / contactless transactions etc. (if the card has an overall limit). Apart from this, RBI has introduced a new rule that existing cards, which have never been used for online (card not present) / international / contactless transactions, will be disabled for this purpose.

The rule also states that all physical and virtual cards will be eligible to be used only on contact based points of use such as ATMs and point of sale (PoS) devices within India at the time of issue / reissue. The card issuer will allow card holders to enable domestic and international transactions without card presence, international transactions and contactless transactions with card presence. Earlier these services used to come automatically with the card but now it will start at the request of the customer. For existing cards, the card issuer can decide at its own risk whether to disable the cardless domestic and international transactions, international transactions with the presence of the card and contactless transaction rights for the cardholder.

DBS Bank India and Lakshmi Vilas Bank merge

In November, the crisis-ridden Laxmi Vilas Bank merged with DBS Bank India. This merger took effect from 27 November. The merger brought relief to depositors, customers and employees of Lakshmi Vilas Bank after a period of uncertainty.

Transferring money from RTGS, collect all these details first

RTGS anytime

From 14 December, RTGS (Real Time Gross Settlement) facility was made available 24 hours, seven days for transfer of money in the country. Customers can now transact money from this facility 365 days a year.

Contactless payment

In order to enable people to make more transactions more easily with the help of contactless card payments, it was decided to increase the limit of contactless card transactions to Rs 5000 per transaction in the meeting of the Monetary Policy Committee in December. Earlier this limit was 2000 rupees. This rule is in force from 1 January 2021.

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