SB Order 05/2024: Guidelines for Regularization of Irregular Accounts under National Small Savings Schemes

The Department of Economic Affairs (DEA), Ministry of Finance, has issued guidelines to address irregular accounts opened under various National Small Savings Schemes through Post Offices. The directive, issued under OM No. 14/1/2018-NS-Part (1) dated 12th July 2024, outlines the procedure for regularizing these accounts.

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Key Highlights:

1. Authority for Regularization:
   The power to regularize irregular accounts is vested solely with the Ministry of Finance. All cases of irregular accounts must be forwarded to the relevant division for further action by the Ministry of Finance.
2. Categories of Irregular Accounts: The guidelines classify irregular accounts into six categories:
   • NSS-87 Accounts:
     • Accounts opened before 2nd April 1990 will get the prevailing scheme rate, while the second account will receive the POSA rate plus 200 basis points on the outstanding balance, subject to conditions. After 1st October 2024, both accounts will earn 0% interest.
     • For accounts opened after 2nd April 1990, similar provisions apply, but without the additional 200 basis points.
   • PPF Accounts Opened for Minors:
     • These accounts will receive POSA interest until the minor turns 18, after which the applicable interest rate will be paid. The maturity period will be calculated from the date the minor becomes an adult.
   • Multiple PPF Accounts:
     • The primary account will earn the scheme rate, while any additional accounts will have their balances merged, with excess funds refunded at 0% interest. Additional accounts will earn 0% interest from the date of opening.
   • PPF Accounts for NRIs:
     • NRIs with active PPF accounts (opened before specific residency conditions) will receive POSA interest until 30th September 2024, after which the accounts will earn 0% interest.
   • Small Savings Scheme Accounts for Minors:
     • These accounts may be regularized with simple interest at the prevailing POSA rate.
   • Sukanya Samriddhi Accounts Opened by Grandparents:
     • Guardianship will be transferred to the natural or legal guardian. If more than two accounts are opened in violation of the scheme, the irregular accounts will be closed.
3. Mandatory PAN and Aadhaar Submission: Post Offices must collect and update PAN and Aadhaar details for all account holders before forwarding regularization requests.
4. Proactive Identification and Public Awareness: All Post Offices are instructed to actively identify irregular accounts and inform account holders of the guidelines through various channels.
5. Concurrence from the Ministry of Finance: Accounts can only be settled upon receiving approval from the Budget Division, DEA, Ministry of Finance.
6. Public Notice and Office Instructions: The guidelines must be widely circulated and displayed in Post Offices.

Conclusion:

The directive emphasizes the importance of adhering to the Ministry of Finance’s rules regarding irregular accounts under National Small Savings Schemes. Post Offices must ensure prompt action and publicize these guidelines to mitigate issues faced by account holders.

Issued by: Assistant Director General (DBT/FS-I), Financial Services Division, Dak Bhawan, New Delhi.

Source : CEPT