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The Department of Economic Affairs (DEA) of the Ministry of Finance has issued guidelines for processing cases of regularization of irregularly opened accounts under various National Small Savings Schemes through post offices. These guidelines have been announced in a circular issued by the DEA on August 21.
Following are the guidelines issued by DEA, MOF…
1. Regular NSS accounts: These are assessed as follows.
(a) Accounts opened prior to DG Post Order No. 35-19/90SB-iii dated 02.04.1990:
(1) The prevailing scheme rate will be applicable to the first account opened.
(2) Prevailing POSA rate plus 200 bps will be applicable on the balance in the second account (opened after the first account).
(3) Points 1 and 2 shall be subject to the following conditions.
(a) The aggregate amount deposited in both the accounts shall not exceed the deposit limit applicable for each year.
(b) The excess deposit (if any) will be refunded to the investor without any interest.
(4) Points 1 and 2 of the OM dated July 12, 2024 to September 30, 2024 issued by the Ministry of Finance allow a one-time special distribution to investors of NSS-87.
(5) Both accounts will have zero percent interest rate from October 1, 2024.
(b) Order of DG Post. No. 35- 19/90-SB-lll dated 02.04.1990 two NSS-87 accounts were opened:
(1) The account opened first will be entitled to the benefits of the prevailing scheme.
(2) POSA rates will be applicable on the outstanding balance of the second account (opened after the first account).
(3) Points 1 and 2 shall be subject to the following conditions.
(a) The total amount deposited in both the accounts shall not exceed the applicable deposit amount for each year.
(b) Excess deposits (if any) will be refunded to the investors without any interest.
(4) Points 1 and 2 of the OM dated July 12, 2024 to September 30, 2024 issued by the Ministry of Finance allow a one-time special distribution to investors of NSS-87.
(5) Both accounts will have zero percent interest rate from October 1, 2024.
(c) In case of more than two NSS-87 accounts…
DG Posts Order No. 35-19/90-DG Posts Order. No. 35-19/90-SB-iii dated 02.04.1990 The principles stated for two accounts opened earlier/later will apply. For the third account which is highly irregular, no interest will be paid and the principal amount will be refunded to the investors.
Zero per cent interest rate will be applicable on all accounts opened under NSS-87 and NSS-92 from October 1, 2024.
2. PPF account opened in the name of a minor
(a) POSA interest for such irregular accounts will be paid till the individual (minor) becomes eligible to open the account, i.e. till the individual attains the age of 18 years. Thereafter, applicable rate of interest will be paid.
(b) The maturity period of such accounts will be calculated from the date on which the minor attains majority, i.e., the date on which the person becomes eligible to open the account.
3 Multiple PPF accounts
(a) The primary account will earn interest at the scheme rate provided the amount deposited is within the maximum limit applicable for each year. (The primary account is one of the two accounts chosen by the investor in any post office/agency bank where the investor wishes to continue the account after regularization.
(b) The amount payable in the second account will be merged with the first account. Provided that the primary account remains within the applicable investment limit each year. After the merger, the primary account will continue to earn interest at the prevailing scheme rate. Excess balances in other accounts, if any, will be refunded at zero interest rate.
(c) On any additional account other than the primary and secondary account, the rate of interest will be zero per cent from the date of opening the account.
(4) Extension of PPF account by NRI
Only to active NRI PPF accounts opened under Public Provident Fund Scheme (PPF) 1968. Where residential status of the account holder is not asked in Form H. The account holder (Indian citizen who has become an NRI during the account tenure) will be offered POSA interest rate till 30 September 2024. Thereafter, the said account will get zero percent interest rate.
(5) Small Savings Scheme account opened in the name of a minor (except PPF and SSA)
Such irregular account can be regularized with a nominal interest. The interest rate for calculating simple interest on the account should be the prevailing POSA rate.
(6) Regularization of Sukanya Samriddhi Account (SSA) opened by grandparents other than guardian:
(a) In case of an account opened in the custody of a grandparent (who is different from the legal guardian), the custody shall be transferred to the person entitled under the applicable law, i.e., the natural guardian (surviving parent) or the legal guardian.
(b) If more than two accounts are opened in a family in violation of Para 3 of Sukanya Samriddhi Account Scheme, 2019, the irregular account shall be treated as an account opened in violation of the guidelines of the Scheme and shall be closed.
All post offices are directed to obtain PAN and Aadhaar details (if not already available) of the account holders/guardians and feed them into the system before sending the regularization request to this office, the circular said.
All post offices should take immediate action to identify such accounts and inform the account holders about the approved instructions through all channels. All circles/zones/divisions are requested to actively monitor the cases requiring regularization, so as to avoid inconvenience to the account holders of small savings schemes.
