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SBI Credit Card Users: EMI Set to Become Costly from This Month. Know Details

SBI Credit Card Fee: India’s largest commercial bank, the State Bank of India (SBI) will from December 1, Wednesday, charge a processing fee on all EMI transactions done through its credit cards. Not just this, the bank has also announced that it will charge a processing fee on the transactions done through the same process. In a move announced last month, the SBI Cards & Payment Services Private Limited (SBICPSL) said that it will charge a processing fee of Rs 99 and levy taxes on it. This means that customers of the bank now have to pay a higher transaction amount whenever they purchase something via the SBI Credit Card EMI scheme. The new rule will be applicable from today. It will also aplly on all equated monthly instalment (EMI) transactions made at retail outlets as well as e-commerce websites such as Amazon, Flipkart and Myntra.

On November 12, that is 18 days ago, the bank issued a notification regarding the move. The SBI credit card holders were sent the notification via an e-mail on the day. “Dear Cardholder, We would like to inform you that with effect from 01 Dec 2021, Processing Fee of Rs. 99 + applicable taxes will be levied on all Merchant EMI transactions done at Merchant outlet/website/app. We thank you for your continued patronage. Please click here to know more about Merchant EMI Processing Fee,” the mail from SBICPSL read. All SBI credit card holders had received this message. So SBI customers, who want to purchase something on EMI via the bank’s credit cards will be eligible to come under the new policy.

The bank said that these rates will apply over and above the interest charges to convert one’s purchases into monthly payments, a service used by lakhs of citizens at present.

The move comes as a jolt to many merchants, who give a discount to EMI transactions by paying the interest to the concerned banks. This, to the customer, then appears a a ‘zero interest’ scheme on the purchase of an item from the merchant.  Even in this case, from December 1, SBI credit card holders will have to pay the processing fee of Rs 99, as per the new rules that have been implemented by the state-owned lender.

According to media reports, a processing fee of Rs 99 will be charged on only those transactions which have been successfully converted into equated monthly installments or EMI transactions.

On the other hand, the processing fee will be reversed if the EMI transaction fails or is cancelled. However, this will not be reversed in case there is a pre-closure of the EMI. For transactions made before December 1, wherein the payment starts at a later date, the new rule will not be followed.

But how does this new rule even work? Suppose you buy a mobile phone using your SBI credit card, from an e-commerce website, for example Amazon, under the bank’s EMI scheme. Then SBICPSL will charge you an additional fee of Rs 99 to process the transaction. It will also charge you added taxes. This additional amount will reflect on your monthly statement of your credit card along with the EMI amount for that product.

The new move, according to reports, is likely to affect ‘Buy Now, Pay Later’ schemes as they may become more expensive on the buyers. These options are usually provided by e-commerce websites.

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Source: News18