As corona virus has hit hard the entire nation, Prime Minister Shri. Narendra Modi has imposed a nationwide lockdown in an attempt to slow the spread of the coronavirus.
With the nationwide lock down imposed across the country to curb the spread of the coronavirus or COVID-19, banks have taken steps of their own to ensure safety of their staff and customers. Banks have changed timings of their branches, reduced staff, and are pushing people to use digital channels instead of visiting the branch.
Lack of physical access to Banks, Insurance Companies, Mutual fund branches means one will have to use digital modes to complete their routine transactions. Moreover to encourage the use of Digital Channels, here are some Bank relaxations which are provided in this Crisis situation:
On 24 March, finance minister Nirmala Sitharaman provided some relief to individuals for banking services. Banks will not levy any charges or penalties if customers are unable to maintain the average monthly balance or average quarterly balance in their bank accounts. Also, there will be no charges for cash withdrawals from ATMs. The waivers are valid until the end of June.
Although some relaxations are announced, but India, at the moment, is under complete lockdown. Severe Travel restrictions have been imposed on all states, and public places have been shut. Rail, Bus services, Taxi services, Auto services have been suspended throughout the country. The question still remains unanswered, “How to manage financial services during this Crisis”?
Managing financial services during Crisis
India’s digital ecosystem is coming to the aid in providing essential financial services. The way the digital ecosystem has evolved in India, many financial transactions can be done online without the need to visit your bank branch, or the office of an insurance company or a mutual fund house. Online transactions are not only helping people cope with the lockdown, but are also aiding them in maintaining social distancing and avoiding handling currency notes.
Here’s how you can continue to carry out all your financial transactions without interruption, across various sectors.
Banking comes under essential services. That’s why branches have been kept open despite the lockdown. Customers do have the option of going to the branch for any urgent requirement. But for all practical purposes, customers may not need to go to their branches.
If one have never used online banking before, it’s possible to activate it using your registered mobile number and debit card. Most banks now allow customers to activate net banking themselves through the bank’s website. A customer can avail of over 250 features on digital platforms internet banking and mobile app. online banking can be accessed either through the bank’s website or through the bank’s app, installed on a Smartphone.
On a bank’s website, customers can practically avail of all the banking services that are available at the bank branch. These include sending and receiving money, Credit card payment, Bill payment, Recharge, Stop payment of a Cheque, ordering a new Debit card or cheque book, requesting for statements, blocking cards, and generating debt and credit card PINs (personal identification number).
Banking through an app may have some restrictions, depending on the bank. Some banks may not allow blocking a card, while others may not have the option to request account statements. However, all the basic services are available on the apps, too.
Also, some banks may have some restrictions on the value of funds that can be transferred to prevent frauds. They may not allow transfers over a specific amount through Real-Time Gross Settlement (RTGS) for the first 24 hours, or not allow Immediate Payment Service (IMPS) transfer to new beneficiaries for a few hours after adding them.
Taking help of digital channels of banking
Effective March 23, banks have been undertaking only essential activities. These include cash deposits and withdrawals, clearing of cheques, remittances and government transactions. Also, banks have been working for fewer hours (around four hours) with limited staff. To avoid customers crowding at branches and to ensure safety in this pandemic, banks have requested customers to avail non-essential services through the mobile and online banking channels. The non-essential banking services that stand suspended include account opening, passbook printing, exchange of notes, foreign currency exchange, and so on.
Such limitations pose immense challenge for senior citizens’ and those who are not tech-savvy. Many may not be comfortable using net or mobile banking services to make regular payments, including paying credit card dues, utility bills, investment installments, and checking their bank balance and statements. Dropping Credit card cheques in drop boxes might not be a good idea as the skeletal staff strength could result in delayed pick-ups.
In the present situation, senior citizens in the family should take help from a trusted family member or a tech-savvy friend to activate internet or mobile banking services. They can then make timely payments without defaults and any additional charges.
To activate internet or mobile banking, one does not need to visit the bank branch with a physical form. Banks allow activation remotely – that is, from your home, using a debit card. For instance, Bank customers with an active debit card can register for net and mobile banking. They need to create a login password/PIN using their customer relationship number (CRN) or Customer ID mentioned in the bank’s passbook/cheque book, card details with card PIN and an activation SMS.
In addition, few Banks are even offering WhatsApp banking services. This facility takes care of basic banking queries and service requests from customers.
Pay utility bills online
Irrespective of lockdowns, this is one activity that must be done through digital channels.
Ideally, one must register for Bill Pay services that bank offers. Registering billers and your details is a one-time affair, after which the facility will ensure that the bill is paid on the due date, without one having to move a muscle. Most banks allow you to register for bill payment, online. You can also take the Bharat Bill Payment System (BBPS) route. Several banks are present on the network, allowing paying bill after entering the relevant details.
One can even pay your utility bills (electricity, mobile, gas, etc.) using mobile wallets and UPI apps such as Paytm, Phonepe, Amazon Pay, Mobikwik, Freecharge etc. These apps also allow paying credit card bills. One can load the amount in your mobile wallets using debit cards, or directly from Bank account using UPI payments. These bills can even be paid online using a debit card through the respective service provider’s website.
On 23 March, the Insurance Regulatory and Development Authority of India announced some relaxations for policyholders. The regulator asked life insurance companies to “enhance” the grace period for policies coming up for renewal by an additional 30 days, if the policyholder makes a request. The same will apply for health insurance policies. Insurers have also been directed to settle claims related to Covid-19 “expeditiously”.
If one have insurance policy premiums to pay, help is at hand. Life insurance companies have been directed to ensure that policyholders get an additional grace period – time available after the due date – to make their premium payments. One can now pay your health insurance premium up to 30 days after the due date, without running the risk of the policy being lapsed.
Insurance companies have been encouraging customers to use digital channels. Some insurers are also offering WhatsApp services. Policyholders can place service requests through WhatsApp, mobile apps and via email.
If one is looking to buy life, health or motor insurance covers, they can either do so through the respective company’s website or through online aggregators. Premium payments can be made using electronic modes such as net banking, credit and debit cards. Life and health insurers have been offering their services through their websites, chatbots, mobile apps and also WhatsApp for quite some time now.
If one is planning to buy a new health or life insurance policy in the wake of Covid-19, it’s possible to do so online. However, whether a policy would be issued online or not depends on its value and the past medical history of the individual.
Apart from policy related information, customers can update their details such as contact information and nomination. They can conduct transactions such as paying renewal premiums, setting or changing standing instructions and fund switching from the comfort of their homes.
Most insurers now allow customers to digitally access policy information update details (contact information and nominee), change standing instructions and so on. Some private insurers even allow annuity customers to digitally verify their existence and continue to get their funds in their accounts.
In the case of health insurance, the purchase process is likely to be completely online if there are no medical check-ups involved. A lot of sales processes are already digitized. Renewal, too, has largely been through digital channels. Few Companies has launched a tele-medical check-up to facilitate purchase of life and health insurance policies since physical check-ups will not be possible.
Some companies have, however, taken measures to issue even high-value policies without medical tests. One can get up to Rs. 2 crore worth of life insurance from some of the top insurers without medical test, and health insurance up to Rs. 1 crore.
For life insurance, the companies look at credit score and income as their experience shows that those with better financial health and income would also take care of their health. For health insurance, companies rely on doctors’ consultation over the phone. According to their research, customers are more open when a doctor is talking to them. The results are better than even medical tests.
In life insurance, many private companies allow for claims to be lodged digitally. For health insurance, the claims are cashless in network hospitals.
MUTUAL FUNDS AND NPS
Although the finance minister has extended the deadline to invest in tax-saving instruments to June 30, 2020, one could use this time on hand to learn the ropes of online investing.
Though the branch offices of mutual funds and registrar & transfer agents are shut, they continue to accept online applications. If one has invested through the ‘paper and cheque’ route, one can still transact in their existing mutual fund folios using online means. Visit the fund house’s website or download its app on smart phone and register with the help of your folio number, Permanent Account Number (PAN), email ID and mobile number linked with the folio. A One-Time Password (OTP) is sent to your email and phone number. Use it to verify your identity and your online account is created. You can then easily redeem your investments. You are now set to sell, switch or even purchase new units. The same is true for existing customers already using digital channels.
If one is already have internet banking facility, one can make fresh purchases or set up systematic investment plan (SIP) online. If one is investing through a mutual fund distributor, the advisor also can help by creating a transaction on the website of a mutual fund.
However, there are multiple options for first-time investors who want to opt for mutual funds in falling markets. There are several online platforms and mobile apps you can use, including PayTM Money, Mobikwik, Zerodha Coin, Kuvera, Groww and Scripbox.
The onboarding for most of these apps is simple, and an individual can start investing immediately. “Even if a person has not done the KYC (know your customer) formalities before, it can be done through apps instantly. The process is paperless. It takes about seven working days to process the KYC. However, a person can invest even while the KYC is under process.
Using video KYC offered by mutual funds, new investors can start their investments in mutual funds without going to the funds’ offices, provided they have online banking access. One can also go directly to the fund’s website and initiate video KYC (this is in-person verification or IPV to make sure one is alive) if one is not KYC compliant. Take photographs of PAN and an address proof and upload the documents. Fill the form correctly else, in case of discrepancy, the KYC application can be rejected.
Even in times of a lock-down, fund houses’ call centres are open to guide. But be prepared to wait for a little longer on account of staff shortage. Separately, online distribution platforms are also available in case you want to open a digital account.
For the National Pension Scheme (NPS), existing subscribers can continue investing online using the Unified Payments Interface (UPI). Those who want to open a new NPS account can do so online on to the National Pension Trust website www.npstrust.org.in.
Most of the essential financial services are now available on digital platforms. Even for first-time users, signing up and on-boarding is now easy and paperless.
Finally, take enough safety precautions to ensure that one do not fall prey to tricksters who are on the lookout for vulnerable victims, especially in times such as these. Social media platforms have been abuzz with messages from fraudsters peddling fake apps and links devised to elicit sensitive account, card and PIN details. Never forget that a bank, insurance company, credit card issuer or a digital wallet will not ask for such details. The call centres are open, so don’t hesitate to seek help. With a skeletal staff though, your waiting time might just be a little longer.