Bank Update – Kotak Mahindra Bank has made a big announcement for its debit and credit card holders, which can prove to be a shock for many people. The bank has decided that it is going to end many insurance benefits associated with its debit cards. Apart from this, changes are also being made in the terms of the credit card, which includes interest rates and fee structure. These changes will be implemented in the coming days and customers are being advised to make a new plan according to their needs.
The insurance benefits associated with debit cards that are ending include personal accident cover, purchase protection, and cover for lost luggage during travel. These facilities were a kind of safety shield for the customers, especially when something untoward happened. For example, if a cardholder lost his life in a rail or road accident, his family could get compensation of up to Rs 15 lakh.
Apart from this, there was also protection of Rs 5 lakh in an air accident and Rs 6 lakh in case of loss of card. But now all these facilities will be discontinued. However, the bank has clarified that all claims filed before July 20, 2025 will be settled under the existing rules.
What are the other new changes?
Talking about credit cards, Kotak Mahindra Bank has also decided to change its cardholder agreement. From June 1, 2025, the monthly interest rate on most credit cards will be increased from 3.50% (42% p.a.) to 3.75% (45% p.a.). However, the existing interest rates will remain applicable on premium cards like Kotak White Reserve and Kotak Solitaire. Along with this, there will be changes in the calculation of Minimum Amount Due (MAD) and rewards program. The fee structure is also being revamped, which may affect the pockets of the customers.
Another special benefit in the insurance facilities of the debit card was the cover for lost luggage. If a customer bought a travel ticket using his Kotak debit card and his luggage got lost, he could get compensation up to Rs 1 lakh. Apart from this, there was also protection of up to Rs 1.5 lakh in case of damage or loss of luggage within 60 days of purchase. All these facilities will now end, due to which customers may have to look for other plans.
In the banking sector, insurance benefits on debit cards have been a major means of attracting customers and maintaining their loyalty. This decision of Kotak Mahindra is surprising because many other banks are still promoting such facilities. This change may increase the dissatisfaction of the customers and may change their opinion towards the bank.
Kotak Mahindra has advised its customers to visit the bank’s website and read the current terms and conditions carefully. Also, if necessary, consider other alternative plans.