While borrowers cheered the low-interest rate period in 2017, debt investors had some anxious moments with interest rates on traditional instruments like Fixed Deposits going down.
The year 2017 is about to end. The first few months of this year saw the common man grappling with changes demonetisation brought in. Since it was introduced in the fag end of 2016, the economy was still adjusting to the sudden transition. Cashless, paperless, low-interest rates, GST, RERA, Benaami Transaction Act were a few crucial financial moves/reforms that set the tone for the year 2017.
While borrowers cheered the low-interest rate period in this year, debt investors had some anxious moments with interest rates on traditional instruments like Fixed Deposits going down. All this and much more drew the contours of the year 2017.
Let’s check out 5 big financial takeaways of 2017.
Rise In Internet Penetration
Internet penetration increased significantly in 2017 owing to fall in connectivity charges and improvement in speed. Higher penetration resulted in an increase in awareness amongst common man about useful financial products and popularised the use of apps for utility services.
The government took the initiative to launch its integrated digital app ‘UMANG’. This app will provide a large number of government services to customers. Banks and financial institutions too came up with their own wallet services. Several wallet companies launched payment banks to increase the service span for its clients. ‘BHIM’, a Unified Payments Interface (UPI) based app, was also launched this year. BHIM allows users to transfer money between accounts by smartphone.
Paperless Revolution
The paperless revolution made its mark in 2017 with an increase in customers accessing services online like Mutual Funds, Loans, investments, Insurance, Credit Cards, etc. Paperless gave customers the ease to apply online and made the documentation hassle-free. Customers not only adapted to the new setup but used online facilities widely to compare, evaluate and fetch themselves a good deal.
This saved time and money and provided them better end-to-end services. Paperless financial products are offering a win-win proposition for the companies and the customers with more transparency, quick turnaround and remarkable improvement in the service quality.
Mutual Funds On A Roll
Mutual Fund schemes remained on an upswing in the post-demonetisation era. With a crumbling black money market, people shifted their investment focus from property and gold to Mutual Fund schemes.
With greater flexibility, higher return prospect and transparency in investment, investors have turned their focus on Mutual Fund investment. According to media reports, the total inflow of money in Mutual Funds in 2017 has witnessed close to Rs. 1.69 crore, which is the highest until now.
Big Policy Changes And Financial Reform
Some big policy announcements of 2017 like Real Estate Regulation and Development Act (RERA) left a huge impact on the Indian financial market. Adopted by several states, RERA reinstated buyers’ trust in the real estate market.
During the year, Goods and Services Tax (GST) was implemented as indirect tax reform. It is still undergoing many changes to make it taxpayer friendly. The exact impact of GST will be clear only in the long-term.
The government made it mandatory this year to link Aadhaar to several financial instruments. It is compulsory to link Aadhaar to the mobile number, bank account, PAN card etc. And if you fail to do so within stipulated deadline, then you’ll not be able to use such services.
Home Buying Made Easier For First Timers
Home sales remained sluggish throughout the year, however, the government relaxed norms for Pradhan Mantri Awas Yojana (PMAY) scheme by increasing the eligible area under the scheme as well as shifting the deadline of the scheme to March 2019. For PMAY benefits, the income slab is now up to Rs. 18 lakh. The subsidy benefit is in the range of 3% to 4% of the eligible loan amount for tenure up to 20 years.
This scheme is expected to draw a positive response from first-time home buyers. It will help many people to uplift their eligibility criteria and avail a Home Loan to buy their first home. Banks reduced Home Loan rates significantly in 2017 and the prevailing loan rate is around 8.3% p.a.
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