Loan interest

From car insurance to interest on SBI home loans, here’s what’s getting expensive from June

New Delhi: There will be changes and new rules coming into effect from June 1 which will impact your financial life. For customers of State Bank of India (SBI), Axis Bank and India Post Payments Bank, some rules would come into effect from June and affect your finances. In addition to bank customers, the motor third party liability insurance premium for different categories of vehicles will also increase, which will directly impact the monthly budget of vehicle owners.

Let’s look at the changes that will come into effect from June

SBI customers will pay higher interest rates on home loans

The State Bank of India (SBI) raised its external benchmark lending rate (EBLR) for home loans by 40 basis points to 7.05%. Previously, the EBLR rate was 6.65%. When offering any type of loan, including home and car loans, banks also add a credit risk premium (CRP) over the EBLR. According to the SBI website, the interest rate increase will take effect June 1, 2022. All variable rate home loans will have interest rates linked to EBLR.

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Increase in Axis Bank service fees

Axis Bank has also increased service fees for salary and savings account holders. The Average Monthly Balance (AMB) requirement has been revised to Rs25,000 from Rs15,000 while the minimum service charge for non-maintenance of balance will remain at zero.

Car insurance premiums for two-wheelers

It is important to note that the motor third party liability insurance premium for different categories of vehicles will increase, as announced by the Union Ministry of Road Transport and Highways.

Those who own two-wheelers with a cylinder capacity of less than 75cc, the cost of third-party coverage is raised to Rs 538. For two-wheelers with a cylinder capacity greater than 75cc but not exceeding 150cc, the cost of the premium will be Rs 714. Two-wheelers with an engine capacity above 150cc but not exceeding 350cc, the cost of the award will be Rs 1366. Two-wheelers with an engine capacity above 350cc, the cost of the award will be Rs 2,804.

Car insurance premiums for four-wheelers

Third-party rates for private four-wheelers have also seen an increase. From June 1, the third party bonus for cars with an engine capacity of less than 1,000cc will be Rs 2,094. For a car whose engine capacity exceeds 1000cc but does not exceed 1500cc, the third party bonus will be of Rs 3,416. For cars with an engine capacity above 1500cc, the premium for them will amount to Rs 7,897. These rates were last revised for fiscal year 2019-20 and have remained unchanged during the COVID-19 pandemic.

India Post Payments Bank Charges for Aadhaar Enabled Payments

India Post Payments Bank (IPPB) has introduced the Aadhaar Enabled Payment System (AePS) service fee. This means that the AePS issuer transaction fee will come into effect from June 15, 2022. However, the first three AePS issuer transactions each month, such as cash withdrawal, cash deposit and mini statement, will be free. If you exceed the free transaction limit, cash withdrawals and cash deposits from the AePS issuer will be charged at Rs20 plus GST per transaction, and statement mini transactions will be charged at Rs5 plus GST per transaction.