Government confident debit card charges will decline

In a bid to promote digital transactions, Finance Minister Arun Jaitley expressed confidence during the question hour in the Rajya Sabha that the charges on digital payments would come down with increase in volumes. Newer technologies are making digital transactions cheaper and it is expected that more people would move towards them, he said, adding that the government has also advised its officials to use digital money. He said the Reserve Bank of India (RBI) is working to fix the Marginal Discount Rate (MDR) charges for debit card transactions above Rs2 lakh. Mr Jaitley said that under the Payments and Settlements Act, the RBI has held that for cash transactions up to Rs1000 the MDR rate would be 0.25%, while for transactions up to Rs2000 it has been fixed at 0.50%. 
 
Mr Jaitley explained that with regard to debit card transactions in petrol companies, the charge is being absorbed by oil companies, while for digital transactions for rail travel it is being absorbed by the government.
 
Responding to another question on the demonetisation decision in the Rajya Sabha, Mr Jaitley said the RBI had begun printing the new currency well in advance but it was the process of recalibration of ATM machines that took time due to the need for maintaining secrecy.
 

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Changes in Our Business Model
 
 
25th Sept 2020
 
Greetings from Moneylife Advisory Services
 
Between financial years 2019-21, SEBI has come up with extensive changes to investor advisor regulations. On Sep 23, 2020, SEBI had issued new additional guidelines. This comes just two months after extensive changes announced in July 2020. Earlier, in December 2019 there was an ad hoc circular
 
As a result of these changes, IAs, cannot accept fees through credit cards, will have to sign a 26-clause investor agreement, have to maintain physical record written & signed by client, telephone recording, emails, SMS messages and any other legally verifiable record for five years. IAs were already asked to record the suitability and rationale for every piece of advice given, sign them and store them for five years.
 
While these extensive and frequent changes, designed to strengthen the conduct of IAs are well-meaning, these have sharply increased compliance efforts and cost. We, being online advisors, find many of changes harder to implement, compared to advisors working in the physical space. We will have to have an army of advisors, administrative and tech staff to be compliant. If we do this, we will have to divert money to these areas and the cost of our service will double. We want to remain the least-cost service in the market to benefit more and more people. In the circumstances, we are forced to change our business model from “advisory” to “research”. This will mean the following:
 
What remains the same:
  • Recommendations on insurance, investment and Lion stocks, will continue as a part of the MAS premium subscription. Our strength has always been research and this will remain available to you through our recommendations.
  • The magazine and all textual content will remain as part of the service
  • We will have to suspend the restructuring tool.
 
What changes:
  • The interactions in Ask / Handholding will offer investment advice but not specific to your situation. It will offer information on investment products and also clarify your doubts about various financial products. It will be a forum for information, not for advice. This will be implemented with immediate effect and our guidelines in Ask, reflect this now.
 
Over the next few weeks our site and our communication to you will reflect these and other additional changes.
 
We feel this will not affect you much in terms of what really matters in investing: knowing what to buy and when to buy. This is our edge and it will still be available to you.
 
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Debashis Basu
Founder