It always helps to save money for the future. But sometimes you may need that money in the present moment. The Government is facilitating this, by allowing the premature closure of PPF accounts, and permitting the opening of small savings accounts, in the name of minors, the Finance Ministry announced, through a statement.
All these changes are part of the proposed merger on separate acts on small savings, PPF and Government savings banks. The government wishes to merge the Government Savings Certificates Act, 1959, and Public Provident Fund Act, 1968, with the Government Savings Bank Act, 1873, according to the statement.
According to the statement, “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.”
The changes proposed are aimed at adding flexibility in the operations of Small Savings Schemes.
According to the Ministry, no existing benefits to depositors will be lost, and all protections will be retained, while consolidating the PPF Act, under the proposed Government Savings Promotion Act.
The ministry also stated that it had added certain new benefits for depositors in the new bill.
The main objective of a common Act is to make implementation for depositors easier. Depositors would no longer need to go through different rules and Acts to understand the provisions of myriad small savings schemes. A common Act would also introduce certain flexibilities for investors.
There is also the ability to prematurely close a Small Savings Schemes if there is a medical emergency or a higher educational need. Investment in the Small Savings Scheme can now also be made by the guardian on behalf of a minor(s), under the provisions made in the proposed bill, according to the statement.
According to the bill, depositors can also now close a PPF account, in case of emergencies, before the completion of five years. In the present scenario, such an account cannot be closed before five financial years are completed.
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The government, according to the amendments, will put in place a mechanism for redressing grievances, and settling disputes amicably, relating to small savings. The statement concludes, by mentioning there is no interest rate or tax policy change, on small savings schemes.