Banks Permitted To Accept Deposits Under Small Savings Schemes

Top three private sector money lenders have been allowed to accept deposits under schemes like NSC, recurring deposits and monthly income plans.

Top three private sector money lenders have been allowed to accept deposits under schemes like NSC, recurring deposits and monthly income plans.

HIGHLIGHTS

• Increased outlets for these schemes would result in greater mobilisation
• Interest rates on the schemes remained unchanged for October-December quarter
• This decision will motivate people to save more

New Delhi: In order to encourage savings, the government has allowed top three private sector banks, to accept deposits under various small savings schemes like National Savings Certificate (NSC), recurring deposits and monthly income plan. Previously, most of the small savings schemes were sold via post offices.

According to a recent government announcement, banks can also sell below schemes:

• National Savings Time Deposit Scheme 1981
• National Savings Recurring Deposit Scheme 1981
• National Savings (Monthly Income Account) Scheme 1987
• NSC VIII issue

As per the recent news, all public sector banks and top three in the private sector — ICICI Bank, HDFC Bank and Axis Bank to be precise — are expected to receive subscription from the expanded portfolios.

So far, these banks were permitted to receive subscription under Public Provident Fund, Kisan Vikas Patra-2014, Sukanya Samriddhi Account, Senior Citizen Savings Scheme-2004.

As a result, this act of having more outlets for selling small savings scheme will lead to greater mobilisation under the scheme.

Last month, the government kept same interest rates on small savings schemes for the October-December quarter.

Since last April, small saving schemes interest rates have been modified on a quarterly basis.

Investments in the public provident fund (PPF) scheme will obtain annual rate of 7.8 per cent while Kisan Vikas Patra (KVP) investments will yield 7.5 per cent and mature in the duration of 115 months.

The one for girl child savings, Sukanya Samriddhi Account Scheme will offer 8.3 per cent interest annually. Likewise, the investment on 5-year Senior Citizens Savings Scheme will yield 8.3 per cent.

The interest rate on the senior citizens scheme is paid quarterly.

On the basis of government’s decision, interest rates for small savings schemes are to be informed on a quarterly basis since April 1, 2016, the news is confirmed by ministry while notifying the rates for third quarter of financial year 2017-18.