Savings schemes holders to have accounts closed if their status changed to ‘NRI’

The government of India has created a clear demarcation between Indians and non-resident Indians (NRIs) when it comes to savings schemes. Amending rules on post office savings schemes like the National Savings Certificates (NSC) and Public Provident Fund (PPF), the government has notified that such accounts would be closed prior to maturity in case of holders changing their personal status to become NRIs.

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The amended rules were notified in the official gazette earlier this month, agencies reported.

The amendment to the PPF Scheme, 1968, says, "If a resident who opened an account under this scheme, subsequently becomes a non-resident during the currency of the maturity period, the account shall be deemed to be closed with effect from the day he becomes non-resident.”The interest payable would be up to the date of the account closure, it said.

A separate notification on NSCs said in case of a similar change of status of the certificate holder before the maturity period, says, "The certificate will be encashed, or deemed to be encashed on the day he becomes non-resident" and interest will be paid accordingly.”

NRIs are not allowed in instruments like the National Savings Certificates, Public Provident Fund, Monthly Income Schemes and other time deposits offered by the post office.

Last month, the government had retained the interest rate on Public Provident Fund for October-December unchanged at 7.8%, in line with the rates for small savings schemes.

Author
Tushaar Kuthiala
Tushaar Kuthiala – Senior Writer

Tushaar has five years experience as a journalist in founding two start-up newspapers. He worked as a special correspondent based in New Delhi with Daily World, an international media organisation. He enjoys reading and writing fiction in his spare time.

 

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