In order to remove existing ambiguities due to multiple Acts and rules for Small Saving Schemes, the Government of India has proposed merger of Government Savings Certificates Act, 1959 and Public Provident Fund Act, 1968 with the Government Savings Banks Act, 1873.
With a single act, relevant provisions of the Government Savings Certificates (NSC) Act, 1959 and the Public Provident Fund Act, 1968 would stand subsumed in the new amended Act without compromising on any of the functional provision of the existing Act.
All existing protections have been retained while consolidating PPF Act under the proposed Government Savings Promotion Act. No existing benefits to depositors are proposed to be taken away through this process. The main objective in proposing a common Act is to make implementation easier for the depositors as they need not go through different rules and Acts for understanding the provision of various small saving schemes, and also to introduce certain flexibilities for the investors.
Apart from ensuring existing benefits, certain new benefits to the depositors have been proposed under the bill. These are:
1. As per PPF Act, the PPF account can’t be closed prematurely before completion of five financial years. If the depositor wants to close PPF account before five years in exigencies, he can’t close the account.
2. Investment in Small Savings Schemes can be made by Guardian on behalf of minor(s) under the provisions made in the proposed bill Guardian may also be given associated rights and responsibilities.
3. There was no clear provision earlier regarding deposit by minors in the existing Acts. The provision has been made now to promote the culture of savings among children.
4. There were no clear provisions in all the three Acts for the operation of accounts in the name of physically infirm and differently abled persons. Provisions in this regard have now been made.
5. In the existing Acts, there is no provision for the nomination with regard to the account opened in the name of the minor. Further, existing Acts say that if account holder dies and there is no nomination and amount is more than prescribed limit, the amount shall be paid to legal heirs.
The above provisions which are proposed to be incorporated in the amended Act will add to the flexibility in the operation of the Account under Small Savings Schemes.
Source- Press Information Bureau (PIB)