Finance in 2024: Key Transformations Taking Effect as of January 1st

As we transition from 2023 to 2024, several financial changes are set to take effect starting January 1, 2024.

Anticipate significant shifts in the financial landscape, covering various areas. Small savings schemes are expected to see increased interest rates, insurance policy documents are poised to become more understandable, inactive UPI IDs will face deactivation, cars are gearing up for price hikes, and the traditional physical verification process for SIM cards is gradually making way for a digital-only verification system.

Outlined below are some noteworthy changes scheduled to unfold as of January 1:

1. Increased Interest Rates on Small Savings Schemes: The Sukanya Samridhi Account Scheme (SSAS) is expected to see a 20 basis point increase, reaching 8.20 percent for the March quarter. Similarly, the 3-year time deposit interest rate will experience a 10 basis point rise to 7.10 percent, commencing on January 1, 2024.
2. Elevated Car Prices: Prominent automotive companies, including Tata Motors, Audi, Maruti, and Mercedes Benz, have announced an impending price hike in January due to rising input costs. A speculated increase of 2-3 percent is expected, potentially higher for specific models.
3. Inactive UPI IDs to be Disabled: UPI accounts on popular apps such as Google Pay, Phone Pe, or Paytm that remain unused for a year will be deactivated from January 1. This measure, following a circular by the NPCI on November 7, 2023, aims to prevent fraud by disabling UPI IDs, associated numbers, and phone numbers without transactions for a year. However, users can re-register their apps for transactions and payments.
4. Simplified Health Insurance Policy Documents: IRDAI has instructed insurers to release revised and simpler Customer Information Sheets (CIS) for health insurance policyholders starting January 1, 2024. This initiative seeks to ensure policyholders comprehend policy features better without complex legal terminology.
5. Digital-only Verification for SIM Cards: The Department of Telecommunications (DoT) has mandated telecommunication companies to eliminate physical verification when selling SIM cards, transitioning to a completely digital Know Your Customer (KYC) process starting January 1, 2024. Customers will only need to present their photo identity proof for digital verification. This move aims to reduce telcos’ acquisition costs and prevent SIM card fraud.

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The DoT stated, “The use of paper-based KYC process shall be discontinued from 1.1.2024,” reflecting the ongoing amendments and changes in the KYC framework.