Attention SBI credit card users! You have to pay extra Rs 99 and tax for EMI purchases starting Dec 1

The State Bank of India (SBI) has announced that it will charge a processing fee as well as tax from its credit card customers on all equated monthly instalment (EMI) purchase transactions. SBI informed this to its credit card customers on Friday, November 12 via an e-mail.

According to reports, the SBI Cards & Payment Services Private Limited (SBICPSL) has said that the bank will now charge a processing fee of Rs 99 and levy taxes on all EMI purchase transactions. This will come to effect from Dec 1, 2021.

The lender will now charge the processing fees for all EMI transactions done at retail outlets and e-commerce websites such as Amazon, Flipkart and Myntra. These charges are over and above the interest charges for converting the purchase into EMIs.

This is likely to hit the cardholders who like to make extensive purchase using EMI payment options offered by merchant websites such as ‘Buy Now Pay Later’( BNPL) etc. This will make purchase through EMi options more expensive.

“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”, reads the email sent to customers.

The processing charges apply to transactions successfully converted into EMIs. All EMI transaction that are made before December 1, with the booking occurring after December 1, will be exempted from this processing fee.

The bank will inform the customers about the applicability of the processing fees on EMI transactions to cardholders through charge slips while shopping at retail outlets. For customers who make online EMI transactions, the bank will intimate processing charges on the payment page.

If the EMI transaction gets canceled then the processing fees will also be cancelled. However, the same will not be reversed in the case of pre-closure. Reward points will not apply for transactions converted into merchant EMIs.

How does this work?

For example, if you purchase some consumer electronics using SBI credit card from one of the e-commerce websites under its EMI scheme then SBICPSL will  charge you Rs 99 as processing fees along with applicable taxes. This will be reflected in your monthly credit card statement along with the EMI amount.

This will make the ‘Buy Now, Pay Later’ schemes more expensive.