Inflation cools

The June month inflation data brings good tidings. The fall to multi-year low levels of 1.5 per cent means that you, as a consumer, will have more funds at your disposal. The steep fall in vegetables and pulses, in particular, can loosen your purse strings. But watch out! While prices of services such as healthcare, clothing and recreation and entertainment have dropped over the year, GST could well upset the apple cart. Higher tax on clothing, health, medicines, education, housing and mobile services is likely to pinch you in the coming months. Nonetheless, the falling trend in inflation can mean good news for borrowers, if the RBI chooses to soften its stance in the upcoming August policy.

With three months of consistent fall in CPI inflation, the central bank may please markets and cut rates. Banks can, in turn, lower lending rates, benefiting borrowers, who have had much to cheer over the past year. Sadly, depositors may then have to brace themselves for more cuts in deposit rates. As they say, you win some, you lose some!

Digital payments to get cheaper

SBI has slashed rates on fund transfers through Real Time Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT) by a whopping 50-75 per cent. But the point to note is that while the bank has retained rates on NEFT and RTGS done through branches, it has reduced them steeply only if done through net and mobile banking. This nudges customers to go digital.

For amounts up to ₹10,000, NEFT charges have been halved from ₹2 to ₹1 (exclusive of GST). For transactions between ₹10,001 and ₹1 lakh, the new charge will be ₹2 (₹4 earlier); for transactions between ₹1 lakh and ₹2 lakh, it will be ₹3 (₹12); for transactions above ₹2 lakh, the new charge will be ₹5 (₹20). For RTGS transactions, the new charge (exclusive of GST) will be ₹5 (₹20 now) for transactions between ₹2 lakh and ₹5 lakh, and ₹10 (₹40) for transactions over ₹5 lakh.

While RTGS is meant for high-value transactions, NEFT is not real time as it is processed and settled in batches. An easier way to transfer money is through Immediate Payment Service (IMPS) that scores both on convenience and speed.

But after the latest tweaks, transfer of higher amounts through IMPS has become pricier for SBI customers.

In most banks, charges are similar across NEFT and IMPS transactions, except for small transactions. For transfers up to ₹10,000, NEFT carried lower charges than IMPS. The sharp cuts in SBI’s NEFT charges have made IMPS relatively more expensive for higher value transactions.

For transactions between ₹10,001 and ₹1 lakh, while SBI will charge be ₹2 under NEFT now, under IMPS, the levy will be a higher ₹5. For transactions between ₹1 lakh and ₹2 lakh, SBI’s NEFT charges are ₹3 against ₹15 under IMPS.

If other banks too cut charges, customers can breathe a sigh of relief. Each of these transfers has become costlier, post-GST, as they carry GST of 18 per cent against the earlier service tax of 15 per cent. Remember though, that UPI , which is also built on IMPS, carries no charge as of now.

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