New transaction norms come into play from January 1

NEW DELHI:  Planning to pay more than Rs 50,000 by cheque or doing payments via third parties? Come January 1, there will be a few changes in rules that you need to keep in mind to ensure a smooth transaction. In order to check fraudulent transactions,  the Reserve Bank of India has decided to introduce a new mechanism called the ‘positive pay system’ for cheque transactions. This regime is set to come into effect from January 1, 2021.

Under the scheme, if you are making payments beyond Rs 50,000, you will have to re-confirm key details such as date of issue, name of the beneficiary, payee, and the amount involved to the drawee bank. These details will be cross-checked before the cheque is presented for payment. In case any discrepancy is flagged by the cheque truncation system (CTS) to the drawee and presenting banks, redressal measures would be undertaken.While availing this facility would be at the discretion of the account holder, banks may make it mandatory for cheques of Rs 5 lakh and above, the central bank said. 

Another change is that when you make an UPI transaction on a third party service provider like Google Pay, you may be required to pay additional charges. The National Payments Council of India (NPCI) has reportedly decided to impose an additional charge on UPI payment services, for third party app providers from January 1, 2021. Meanwhile, the RBI has already announced enhanced limits for contactless card payments and e-mandates on cards (and UPI) for recurring transactions from Rs 2,000 to Rs 5,000. This also becomes effective from January 1, 2021.

Sebi, for its part, has introduced detailed guidelines for determining the risk factor in mutual funds for retail investors via a new risk-o-meter tool. The new system comes after the Franklin Templeton fiasco and introduces a fresh category of ‘very high’ risk instruments, replacing the old model which was based simply on a scheme’s declared category without adequately considering its actual portfolio. The new system becomes effective January 1.

Another change that investors have to deal with from the new year is that when they invest in a mutual fund, for instance, they will receive the purchase Net Asset Value of the day when their money actually reaches the asset management company, irrespective of the size of the investments. “It has been decided that in respect of purchase of units of mutual fund schemes (except liquid and overnight schemes), closing NAV of the day shall be applicable on which the funds are available for utilization irrespective of the size and time of receipt of such application,” Sebi has said. 

Meanwhile, the Insurance Regulatory and Development Authority of India (Irdai) has directed all life insurance companies to provide a standard individual term life insurance policy from January 1, 2020. Apart from the benefits and riders stated in the Annexure, no others are to be offered. There  will also be no exclusions under the product other than the suicide exclusion.