Premium Cardholders Lose ₹1 Crore Insurance Cover as SBI Restructures Key Terms

What happens when a silent clause gets removed overnight? Cardholders are now waking up to a notice that may impact their financial planning more than expected.

Starting July 15, 2025, SBI Card has introduced major policy changes that affect millions of users. The air accident insurance cover of up to ₹1 crore, once attached to premium credit cards, will no longer be available.

Along with that, the company has also restructured the way payments are settled and how the minimum amount due (MAD) is calculated. These updates were confirmed through multiple public notices released on the official SBI Card website earlier this month.

Insurance Cover Discontinued for Premium Cardholders

Premium SBI credit cards such as Elite, Miles Elite, Miles Prime, Prime, and Pulse earlier came with complimentary air accident insurance ranging from ₹50 lakh to ₹1 crore. That benefit has now been fully withdrawn.

As per the public notification issued by SBI Card, this discontinuation will come into effect from July 15, 2025, for most cards. For co-branded cards, the changes will roll out from August 11, 2025.

The discontinued insurance benefit includes accidental death cover during air travel, which was offered without any extra premium. Many cardholders were unaware they were even covered under such a scheme. Now, they must seek personal insurance elsewhere, especially frequent flyers.

Previous Insurance Coverage (Now Removed)

Card Type	Earlier Insurance Cover	Change Effective From
SBI Elite	₹1 crore	July 15, 2025
SBI Prime	₹50 lakh	July 15, 2025
Co-branded Elite	₹1 crore	August 11, 2025

Source

Next, the change in payment settlement structure brings in new financial order for credit card users.

Read More – RBI’s New Credit Card Rules: How It Affects Your EMI & Loan Eligibility

Settlement Order Now Prioritises Government Dues and Charges

Another key update is the change in the order of payment settlement. This determines which part of a cardholder’s dues get paid off first when any amount is paid.

Earlier, retail purchases were typically adjusted early. However, under the new rules effective July 15, SBI Cards will first adjust taxes and fixed charges before any spend-related amounts. That means the interest-bearing balances like cash advances or retail spends may remain unpaid longer, which can lead to higher interest accumulation.

New Order of Payment Settlement

Priority Level	Component
1	GST and government levies
2	EMIs on card
3	Fees and charges
4	Finance charges (interest)
5	Balance transfers
6	Retail purchases
7	Cash withdrawals

This structure has been detailed in SBI Card’s official customer notice dated July 5, 2025. It ensures that statutory dues are cleared first, keeping the company compliant with tax authorities. However, it leaves less breathing space for consumers with rolling balances.

To understand how these changes will affect monthly bills, one needs to look at the revised MAD rule.

Minimum Amount Due Calculation Gets Tighter

As part of this policy overhaul, SBI Card has updated its MAD formula. The new rule states that the minimum due will now include the entire amount of GST, finance charges, EMIs, and all applicable fees, plus 2 percent of the remaining balance.

Previously, cardholders could clear as little as 5 percent of the total outstanding to avoid late payment fees. Now, the threshold has been raised significantly.

Revised MAD Breakdown

Component Included	Percentage Applied
GST	100%
EMIs	100%
Fees, charges, and interest	100%
Over-limit amount (if applicable)	100%
Remaining balance	2%

This change forces users to pay a much higher amount each billing cycle, reducing the tendency to revolve credit at low cost.

Next, it’s important to look at who else this affects apart from standard cardholders.

Also Read - How to Apply SBI Credit Card – Step-by-Step Guide

Co-branded Cards and State-Wise GST Variation Also Included

The changes are not limited to SBI’s primary credit card portfolio. They also impact co-branded cards with banks like UCO, Central Bank of India, Karur Vysya Bank, and others. Insurance benefits will be removed in these cards starting August 11, 2025.

In addition, GST treatment on credit card transactions varies for residents in Haryana. They will see the tax split into Central and State GST (9% each) instead of the usual 18% Integrated GST seen in other states. SBI Card’s official PDF confirms this difference in its tax structure, aligning with regional GST laws.

GST Treatment in Different Regions

State/Region	GST Split	Applicable GST Rate
Haryana	CGST + SGST (9% + 9%)	18%
Other States	IGST	18%

Consumers in Haryana may notice this bifurcation in their billing statements, especially when dealing with EMIs and financial charges.

Conclusion

The latest SBI Card policy update has removed insurance covers, shifted how bills are settled, and changed monthly payment thresholds. It affects not just elite customers but regular cardholders across India, including those using co-branded credit cards.

SBI Card’s customer communication, last updated on July 5, 2025, lays out these changes in detail. As financial behavior shifts and regulatory priorities evolve, credit card users will need to adapt swiftly. Understanding these billing structures is no longer optional, it will directly impact out-of-pocket expenses.

Cardholders are encouraged to revisit their monthly payment plans, explore external insurance options, and check their statements for tax structure differences based on location.

These shifts mark a clear turn in how card transactions are managed, placing responsibility back in the hands of users.

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