Higher mortgage rates, car insurance and three other changes to expect in June

It always makes sense to factor in changes brewing in the financial space to ensure your plans don’t go astray. There are several changes, starting in June, that can affect your life, from higher payments for home loans and car insurance to buying hallmarked gold jewelry, regardless of purity.

Here are five key financial and operational changes you should know about.

Higher Interest Rates for SBI Home Loans

SBI extended its domestic mortgage lending outside the benchmark-based total lending rate (EBLR) via an average of 40 basis points (bps). A bps is one hundredth of a percentage point. The growth will take effect on June 1, 2022

If you are a State Bank of India home loan borrower, you can pay higher equivalent monthly installments (EMI) from June.

The SBI raised its benchmark-based external lending rate (EBLR) by 40 basis points (bps) for home loans. A basis point is one hundredth of a percentage point. The increase will take effect on June 1, 2022. Previously, SBI’s EBLR was 6.65%, while the repo-linked lending rate (RLLR) was 6.25%.

The EBLR is the sum of the external benchmark rate (EBR) and the credit risk premium (CRP), according to the SBI website.

SBI earlier announced a 10 basis point increase in its marginal cost-based lending rates (MCLR), effective May 15, 2022.

Axis Bank increases minimum balance limits

Axis Bank has increased the average monthly balance required for savings and easy pay schemes in semi-urban and rural areas from Rs 15,000 to Rs 25,000. Alternatively, depositors must have a term deposit of Rs 1 lakh . Any shortfall, generally, attracts a penalty. The new minimum balance limit comes into effect on June 1.

The bank also raised the limit on its Liberty Savings Account, which is a special account that allows depositors to maintain the specified balance or spend as much in the account. The limit has been raised from Rs 15,000 to Rs 25,000. This means that account holders must either maintain an average monthly balance of Rs 25,000 in their accounts or spend the same in a month through the account.

Car insurance rates will go up

From June, the premium rates for automobile liability insurance for two- and four-wheelers will increase. This policy provides coverage for damage caused to any third party.

The Ministry of Road Transport and Highways recently notified the new tariffs under the Motor Vehicle Rules 2022 (Basic Premium and Third Party Insurance Liability), which will come into force on June 1, 2022.

For cars with an engine capacity exceeding 1,000cc, premium rates have risen from Rs 2,072 earlier to Rs 2,094, while premiums for cars between 1,000cc and 1,500cc will rise from Rs 3,221 earlier to 3,416. However, for a cylinder capacity greater than 1,500 cc, the premiums will increase from Rs 7,897 to Rs 7,890.

Read here to find out about the evolution of premiums for other vehicle categories – two-wheelers and electric vehicles (EVs).

Hallmarked gold for all types of

Gold jewelry
Jewelers can only sell gold hallmarked jewelry in India, regardless of purity, the Bureau of Indian Standards (BIS) notified in April

From June 1, 2022, jewelers can only sell hallmarked gold jewelry in India, regardless of purity, the Bureau of Indian Standards (BIS) notified in April. New quarters have also been added for setting up jewelry hallmarking.

“The second phase of mandatory hallmarking will cover an additional three carats of gold jewelry/artifacts viz. 20, 23 and 24 carats as mentioned in Indian Standard IS 1417, and 32 new districts under the compulsory hallmarking regime in which AHC (Analysis and Hallmarking Centres) has been set up after implementation of the first phase of the mandatory punching order,” a statement from the Press Information Office said.

A-EPS payments via IPPB will be billable

India Post Payments Bank (IPPB), a subsidiary of India Post, has announced the introduction of issuer fees for the Aadhaar-enabled payment system (AePS), effective June 15.

The first three AEPS transactions of each month will be free. Thereafter, each cash withdrawal or deposit will cost Rs 20 plus GST. A mini-statement transaction would cost Rs 5 plus GST, according to a statement from the IPPB. India Post Payments Bank is a subsidiary of Indian Post, which is regulated by the Department of Posts.