Railway fare hike to less SBI home loan EMI- Key changes to impact your monthly budget from January 1

New Delhi: With the New Year 2020, several key changes to be applicable from today (January 1, 2020), which are likely to impact your monthly household budget. The country's biggest lender State Bank of India is all set to roll in new changes in their banking system along with several other players in the market. These changes include reduced SBI loan EMI, SBI OTP-based cash withdrawal system, no MDR charges applicable on payment via RuPay and UPI, no charges on NEFT facility, pension commutation under EPFO, Rs 10,000 penalty on filing ITR and across-the-board hike in railway fare. 

1. SBI cuts external benchmark lending rate by 25 bps

SBI has lowered its external benchmark based rate (EBR) by 25 basis points (0.25 per cent) to 7.80 per cent from 8.05 per cent per annum. 100 basis points/bps = 1 percentage point. The new rates will come into effect from January 1, 2020. SBI becomes the first bank to cut its external benchmark rate after the RBI’s monetary policy review in December.

“With this reduction, the interest rate for existing home loan customers as well as MSME (micro, small and medium enterprises) borrowers who have availed loans linked to external benchmark based rate would come down by 25 bps,” the bank said in a statement. The public sector lender further mentioned that new homebuyers will get loans at an interest rate starting from 7.90 per cent per annum from 8.15 per cent earlier.

2. SBI OTP-based cash withdrawal system-

SBI has announced the launch of OTP based ATM withdrawal for transactions above Rs 10,000 between 8 PM to 8 AM. OTP will be received on the customer’s mobile number registered with the Bank. The One-time password (OTP), an additional factor of authentication, will protect State Bank cardholders from unauthorized ATM cash withdrawals. This facility will not be applicable for transactions, where a State Bank cardholder withdraws cash from another bank's ATM. In this process, once the cardholder enters the amount they wish to withdraw, the ATM screen will display the OTP screen. The customer has to input the OTP received for getting the cash.

3. No MDR charges applicable on payment via RuPay, UPI

In a bid to promote digital payments, Finance Minister Nirmala Sitharaman said no MDR charges will be applicable on transactions through homegrown RuPay and UPI platforms beginning January 1, 2020. Department of Revenue (DoR) will soon notify RuPay and UPI as the prescribed mode of payment for digital transactions without any Merchant Discount Rate (MDR), she added after meeting with CEOs of public sector banks. Accordingly, all companies with a turnover of Rs 50 crore or more will be mandated by DoR to provide the facility of payment through RuPay Debit card and UPI QR code to their customers, as reported by PTI.

4. No charges on NEFT facility-

In order to promote digital payments, Reserve Bank of India (RBI) has directed banks not to charge savings account holders for National Electronic Funds Transfer (NEFT) with effect from January 2020. RBI had already waived NEFT processing charges that it imposed on banks with a directive that they pass on the reduction. RBI in its circular dated November 8, 2019, said, "To further empower every citizen with an Exceptional (e) Payment Experience, and provide her access to a bouquet of options, the Reserve Bank proposes to mandate banks not to charge savings bank account customers for online transactions in the NEFT system with effect from January 2020.

5. Pension commutation under EPFO-

According to a PTI report, the labour ministry will enforce the retirement fund body EPFO's decision to restore pension commutation, or advance part-withdrawal, under the Employees' Pension Scheme from January 1, 2020, a move which will benefit 6.3 lakh pensioners, a source said. These 6.3 lakh pensioners had opted for commutation of their pension and got a lump sum amount at the time of retirement from their pension accumulations or fund before 2009. The provision for commutation of pension was withdrawn by the EPFO in 2009.

6. File belated ITR till March 31, 2020-

Budget 2017 introduced a law of levying late filing fees under Section 234F of Income-Tax Act, 1961, which became effective from FY18 or assessment year 2018-19 onwards. If individual files belated ITR on or before December 2019, he or she will require to pay Rs 5,000 as penalty while filing it after December 31, 2019, but before or on March 31, 2020, will make him or her pay Rs 10,000 as fine.

7. Railways hikes passenger fare

The Railway Ministry late on Tuesday ordered an across-the-board hike in passenger basic fare. The hike will come into effect from midnight. “Ministry of Railways has decided to revise the basic passenger fare... effective from 1 January 2020,” said the order issued. The fare has been hiked by 1 paise per km for ordinary non-AC trains. The fare has been hiked by 2 paise per km for mail and express trains (non-AC coach) and 4 paise per km for travel in AC classes.