5 Banking Changes From 1 July

Due to the coronavirus pandemic induced lockdown, some changes/relief was provided by the government on banking services. As the month of June comes to an end, here are some banking changes applicable from 1 July 2020 that you should note:

1. ATM Charges

As part of the first and immediate set of stimulus in March, Finance Minister Nirmala Sitharaman had announced relief on ATM withdrawals made from any bank ATM till 30 June. Since no extension was made in this regard, the charges applicable to these transactions will be the same as during the pre-lockdown period.

Generally, customers are only allowed a limited number of free ATM cash withdrawal transactions depending on whether these were made at ATMs belonging to the bank or a different bank. Customers are charged a fee on transaction beyond the prescribed limit. maintenance

2. Minimum balance requirement

Between April and the end of June, bank customers were not required to maintain a minimum account balance to keep their savings bank account active or avoid penalty on failing to do so. From 1 July, customers will have to maintain the minimum balance, which varies from bank to bank and type of bank account.

Note that apart from a fine, some banks freeze accounts on failing to comply with minimum balance requirement.

3. Lower interest on savings bank account balance at PNB

On 3 June, Punjab National Bank (PNB) had announced that it will lower interest rate on savings account deposits by 0.50 percentage point, with effect from 1 July 2020. For deposits up to Rs 50 lakh, the new interest rate will be 3 percent, down by 0.50 percent from 3.50 percent. Deposits of Rs 50 lakh and above will earn interest of 3.25 percent as against 3.75 percent.

"Interest shall be paid on a daily product basis at the rate of 3 percent per annum in accounts where the end-of-day balance is up to Rs 50 lakh and at the rate of 3.25 percent per annum in accounts where the end-of-day balance is above Rs 50 lakh. Interest shall be credited at end of each quarter i.e. February, May, August and November," PNB had said in a tweet.

4. Form 15G/15H

The Central Board of Direct Taxes (CBDT) had allowed the Form 15G/Form 15H submitted by taxpayers for financial year 2019-20 to remain valid till 30 June 2020 for the current financial year 2020-21. This means that investors who are required to submit the Form-15G/Form-15H for lower or nil deduction of tax from their income have to submit it in the first week of July 2020 for the current financial year.

5. Auto-debit towards APY to restart

Starting 1 July, the Pension Fund Regulatory and Development Authority (PFRDA) is going to restart the auto-debit facility for the Atal Pension Yojana (APY) contributions. These were stopped till 30 June due to the coronavirus pandemic, to provide more liquidity to subscribers facing cash problems.

If you are a APY subscriber, you will have to maintain sufficient balance from 1 July. Even if you fail to do so, the good news is that PFRDA will not charge any penal interest till 30 September 2020 for those who cannot comply.