Clarification on Regularization of Accounts Opened in Deviation of National Small Savings Schemes
The Department of Economic Affairs (DEA), Ministry of Finance, has issued important clarifications regarding the regularization of accounts opened in deviation from the rules under the National Small Savings (NSS) schemes. These clarifications, based on the guidelines communicated under SB Order No. 05/2024 dated 21.08.2024, specifically address issues related to the interest rate changes and the continuation of certain accounts under the Public Provident Fund (PPF) scheme.
Key Points of Clarification
- Zero Interest Rate on Accounts Under NSS 87 and NSS 92
Effective from 01.10.2024, all accounts opened under the National Savings Scheme (NSS) 87 and NSS 92 will attract zero rate of interest. This directive comes as part of an ongoing effort to regularize accounts that have been opened in deviation from the prescribed rules. - Minor Accounts with Guardianship
The clarifications also address the eligibility of minors holding PPF accounts. Minor accounts with a guardian may continue to hold their PPF account or open a new one. These accounts will continue to earn the prevailing interest rate under the PPF scheme, currently set at 7.1% per annum.
The new guidelines primarily target those PPF accounts that were opened irregularly, particularly those opened for minors without the required guardianship. The purpose of these guidelines is to regularize such accounts, ensuring compliance with the established rules, in the public interest.
Objective and Impact of the Guidelines
The aim of these clarifications is to bring clarity to small investors who may have opened accounts in contravention of the established rules for NSS schemes. The focus is to regularize these accounts, ensuring compliance with the National Small Savings Rules while continuing to offer benefits to those who have invested under the scheme in good faith.
By applying these changes, the government seeks to address irregularities and provide a clear path for affected individuals to bring their accounts in line with the official rules, thus safeguarding their investments.
Final Directive
The Department of Economic Affairs has issued these clarifications with the goal of ensuring that all concerned authorities comply with the updated guidelines. It is requested that these directives be circulated to all relevant stakeholders to ensure proper understanding, guidance, and necessary action. The full copy of the OM No. 14/1/2018-NS-Part (1) dated 30.09.2024 from the DEA is attached for reference and further action.
These measures are a step toward greater transparency and adherence to the rules governing National Small Savings Schemes. By regularizing accounts and providing clarity on the interest rates and eligibility of minor accounts, the DEA aims to protect small investors while ensuring that the scheme functions according to its intended guidelines.
For any queries or further information, concerned authorities should refer to the attached official communication from the Department of Economic Affairs.
