Key Financial Changes to Look Out for in June
As the month of June begins, several significant financial changes are set to take effect, impacting consumers, investors, and borrowers alike. Adjustments include revised cut-off timings for overnight mutual fund transactions, evolving credit card terms from major banks, and potential interest rate cuts that could alter borrowing costs significantly. Here is a detailed overview of what to expect this month.
Revised Cut-Off Timings for Overnight Mutual Funds
The Securities and Exchange Board of India (SEBI) has implemented new cut-off timings for overnight mutual fund schemes, starting June 1. This move aims to enhance operational efficiency and align the Indian mutual fund system with international standards.
Under the updated rule, applications submitted by 3 PM will receive the previous day’s Net Asset Value (NAV), while transactions submitted after that time will be processed based on the NAV of the next business day. Furthermore, for online applications, a later cut-off time of 7 PM will apply specifically for overnight fund transactions. This change is expected to facilitate smoother transactions and improve investor convenience.
Anticipated RBI Repo Rate Cut
The Reserve Bank of India (RBI) is expected to make headlines on June 6 when it reviews the repo rate during the upcoming monetary policy announcement. Earlier in the year, the RBI lowered the repo rate twice by 25 basis points each time, bringing it down to 6 percent.
Given that retail inflation has remained below the RBI’s medium-term target of 4 percent for three consecutive months, economists anticipate another rate cut of 25 basis points. If this occurs, it will provide immediate relief to existing borrowers with repo rate-linked loans through lower home loan interest rates. However, new borrowers may not fully benefit from this reduction, as some private sector banks have yet to pass on the entire rate cut advantage to new home loan products.
Changes in Credit Card Terms by Axis Bank
Axis Bank has announced revisions to its credit card offerings, set to take effect from June 20. The changes present a mixed bag for cardholders, with some benefits improving while others may become less favorable.
For example, significant downgrades are expected for popular cards such as the Magnus and Magnus for Burgundy. Cardholders on these accounts will earn 12 EDGE REWARD points per Rs 200 spent up to Rs 1.5 lakh monthly. Once this threshold is exceeded, the earning rate increases temporarily to 35 points but subsequently reverts to 12 points thereafter.
Conversely, advantages are being introduced for other cards, such as Select and Privilege, which will now feature enhanced benefits. Additionally, the Flipkart Axis Bank Credit Card has introduced a cap on accelerated earnings, raising cashback for purchases made on Myntra from 1 percent to 7.5 percent, though this is now capped at Rs 4,000 per quarter.
Kotak Mahindra Bank Updates
Effective June 1, Kotak Mahindra Bank is rolling out adjustments to its credit card rewards program. Significant reductions in the accrual of reward points will affect various spending categories like education, utilities, and online gaming. The value of reward points will also see a decrease, with Kotak Royale, League, and Urbane cardholders now earning 7 paise per point, down from 10 paise.
Conclusion
As June unfolds, these financial changes underscore the dynamic nature of India’s financial landscape. Investors and borrowers should stay informed and proactive in understanding how these revisions may affect their financial decisions. Whether it’s adapting to new mutual fund cut-off timings, anticipating shifts in interest rates, or navigating updated credit card terms, being aware of these developments is crucial for effective financial management.
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