Whether you are using credit and debit cards for your day-to-day transactions or investing in National Pension System and mutual funds, there are a number of important changes coming up in October that will impact your money box.
Tokenisation of cards
The Reserve Bank of India's (RBI) tokenisation rule for credit and debit cards comes into effect from October 1. It prohibits all merchant websites from saving your card numbers, CVV or expiry date on their server for processing online transactions. Card users should either create a token before buying an item on the shopping website and save that token on the particular website (for future use) or generate a token and save it (for future use) at the time of payment after shopping.
However, the debit and credit card tokenisation process is not mandatory and customers can choose not to tokenise their cards on a merchant’s website. In that case, a customer will have to enter the card details afresh for each transaction, including the 16-digit card number, expiry date and card verification value (CVV) while purchasing anything online.
With tokenisation, the online shopping experience using credit and debit cards will become safer. The token masks the details of your card, so in case there is a data leak from the merchant website, the fraudster cannot misuse the card.
New credit card rules
In April 2022, the RBI had released master directions for credit and debit card issuance which are effective from October 1. Here are the brief details of the new credit card rules.
Card issuers would have to seek One-Time Password (OTP) based consent from the cardholder for activating a credit card if the same has not been activated by the customer for more than 30 days from the date of issuance. This rule is introduced for security purposes and to avoid any misuse. The card issuers would also have to close the credit card account without any cost to the customer. In case of a renewed or replaced card, the closure of an inactivated card shall be subject to payment of all dues by the cardholder.
Card issuers shall ensure that the credit limit as sanctioned and advised to the cardholder is not breached at any point in time without seeking explicit consent from the cardholder.
NPS e-nomination updation to get less tedious
Starting October 1, the e-nomination process for National Pension System (NPS) government and corporate sector subscribers is set to get easier. At present, their online requests to update the nominations need to be authorised by the nodal offices or the corporates they are employed with. This requirement for authorisation has led to a huge backlog and, therefore, a delay in approving the requests.
So, from October 1, the Pension Fund Regulatory and Development Authority (PFRDA) has decided that once the subscriber—employee puts in the e-nomination request, the nodal offices will be given the option to either accept or reject it. If the nodal office fails to respond within 30 days, the change in nomination request will automatically get accepted by the system. While making updating the nomination, subscribers also have to submit an online declaration stating that the nomination will be held void if it is found that it is not in line with the PFRDA's exit and withdrawal regulations.
SEBI’s rule for MF subscribers: Furnish nominations or opt out of the declaration
Nomination is an important element in all investments that you make. The Securities and Exchange Board of India (SEBI), the financial market regulator, too, has instructed all mutual fund houses to take steps to ensure that the nomination is in place for all mutual fund investments.
Investors subscribing to mutual fund units on or after October 1, 2022, will have a choice to either furnish their nominations or to opt out of a nomination by submitting a request to that effect.
The investors can nominate by filling up a form and submitting it to the fund houses or the registrar and transfer agents. Investors who are keen to opt out of the nomination have to do so by following the same process by using the specified format. In case the investor is keen to complete the process online, then the person can either use an e-Sign or can send the fund house a scanned copy of the duly signed format applicable.
All existing mutual fund folios held in a single name or jointly need to have a nominee or an explicit opting-out declaration.
Mutual fund folios without nomination or an opting-out declaration will be frozen and investors cannot sell their units in such folios.
Are you an income tax-payer? You cannot contribute to APY anymore
Atal Pension Yojana (APY), a scheme available under the National Pension System, is primarily targeted at unorganised sector workers in the lower income groups. Unlike NPS, which is a defined contribution scheme, APY offers a pre-decided pension - Rs 1,000 to Rs 5,000 a month – at the age of 60, depending on subscribers’ age at enrolment and contribution during working years. While it is designed for lower-income groups, others, too, could contribute to the scheme so far. But not anymore.
Starting October 1, you will not be able to make contributions if your income falls in the taxable category. Contributions made before this date will continue to be eligible for deductions under section 80CCD(1) up to the overall limit of Rs 1.5 lakh.
Charges imposed to pay rent using the credit card
ICICI Bank has introduced a charge of one percent on paying rent using a credit card. The charges will be levied on payment for rent from October 20. Till now no such charges were levied by any bank’s credit card to pay rent. Rent can be paid with credit cards on a number of third-party websites and apps, including RedGiraffe, Cred, Paytm and Magicbricks. This charge is beyond the processing fees of 0.4 per cent to 2 per cent being imposed by these websites and fintech apps to pay the rent using credit cards.