FINMIN – Revision of interest rates for Small Savings Schemes- discontinuation of physical pre-printed NSC and KVP certificates

Revision of interest rates for Small Savings Schemes- discontinuation of
physical pre-printed NSC and KVP certificates

N o. 1104/2016-N S.I l
Government of India
Ministry of Finance
Department of Economic Affairs
(Budget Division)

North Block, New Delhi

      Dated: 13.05.2016

OFFICE MEMORANDUM

Subject:          Revision of interest rates for Small Savings Schemes- discontinuation of
physical pre-printed NSC and KVP certificates – regarding.

1. The undersigned is directed to refer to this Department’s OM of even number dated 23rd March, 2016, vide which the modalities of discontinuing pre-printed KVP and NSC certificates from 01.04.2016 were stated. The current OM states the reconsidered decision in this regard, in supersession of the OM of even number dated 23^rd March, 2016.

Date of implementation

2. In view of the difficulty expressed by the Department of Posts vide their D 0 letter 61-01/2016-SB dated 07.04.2016, the date for discontinuation of pre-printed KVP and NSC certificates in Post Offices and Banks, is being postponed by a quarter, to 01.07.2016. All banks and the Department of Posts are requested to return the remaining stock of physical pre-printed KVP/NSC certificates at the close of business on 30.6.2016 to the ISP, Nasik.
3. It may be noted that no physically pre-printed KVP and NSC certificates may be issued on or after 1.7.16 by banks or Post Offices.

Two modes of issue of NSC/KVP certificates on and after 1.07.2016

4. The NSC/ KVP certificates shall be issued in the following 2 modes on and after 1.07.2016

• Exclusive e-mode: The format for e-mode is given in Annex I for KVP and NSC. The Part A of the format is to be made accessible for viewing by a customer online in a non-printable form and Part B of the format needs to be maintained as part of the database only. Any customer can apply for viewing of NSC or KVP through online secure system for which he/she has to open savings account (if Savings Account is not already opened) and apply for Internet Banking before purchase of NSC or KVP. A customer shall have access of viewing only his/her own deposit under this mode at all times.
• Passbook mode (e-mode format printed or recorded on a passbook): Under this mode, the format for e-mode as given in Part A of Annex I for KVP and NSC, shall be either printed or entered manually on a passbook and such Passbook should be issued with physical signature(in blue ink) of the authorized official. Manual entries should be made only if either printer is not supplied or it is not in a working condition. Efforts should be made to provide adequate Passbook printers to all Post Offices and bank branches authorized to handle Small Savings schemes.

5. The Government advises the use of “exclusive e-mode” over the “passbook mode”, wherever possible. The choice of the mode (one or multiple modes) may ideally be left to the customer unless the infrastructure of the issuing office/branch restricts the compliance with any particular mode. If any customer wants to replace Passbook mode with exclusive e-mode, the passbook may be collected back and destroyer after cancelling all the pages by the authorized official. So far as possible, customer should be convinced to opt for “exclusive e-mode”. This is to facilitate the transition to a paperless system.

6. In all cases, the system should be able to record with date the issue of NSC/KVP certificates under both the modes and keep track of the modes used by individual customers. The physical signature of the issuing officer at the time of issue of the certificate in passbook mode should have designation stamp as the same is of crucial importance for establishing the authenticity of the certificate issued. In case of the passbook mode, the Post Office or Bank Branch, shall take receipt of the passbook by the customer or agent (when duly authorized by the customer) in the Account Opening form in lieu of having received the same.

7. In case the Passbook certificate is lost, the customer can get this issued in duplicate by paying the required fee as prescribed for issue of duplicate passbook and by following the process laid down by DoP and the respective Banks, in this regard. In case already pre-printed NSC or KVP are lost or mutilated, already laid down procedure for issue of duplicate NSC or KVP should be followed but instead of pre-printed duplicate NC or KVP, only Passbook should be given in lieu of pre-printed NSC or KVP. The old certificate number may be noted in this case, on the passbook issued.

Pledging

8. The passbook mode shall be eligible for pledging throughout the country from 1.7.2016. In case of pledging of NSC or KVP, the authorized Authority or bank shall send requisition to relevant CBS Post Office/ bank branch along with the passbook for verification of data and freezing the amount through mutually agreed mode. Similarly, information regarding release of security or forfeiture of security may be exchanged between these authorities. DoP may work out the modalities with banks in this regard before 1.7.2616. Pledging of the KVP/NSC issued after 1.07.16 shall be done only at the office/branch where these are held in both banks/DoP. However transfer of KVP/NSC from one post office to another and from one bank branch to another shall continue according to existing rules. NSC or KVP once pledged should not be transferred unless security is released.

Transfer

9. In case of transfer of NSC or KVP from one person to another, both the persons shall apply for transfer of NSC or KVP in the prescribed format. The Post Office or Bank concerned shall allow transfer after applying due diligence and enable online viewing to the new owner if exclusive e-mode is applied and remove the NSC or KVP from the online view of old owner.

10. At the time of transfer of the KVP/NSC from one person to another, apart from the changes in the electronic database entries/physical office ledger entries as the case may be, Passbook if already issued should be obtained in original and re-issued in the name of new customer by cancelling the already printed or manual entries in the name of old owner. The cancellation should be by drawing cross lines with red ink followed by signatures and designation stamp of authorized officials.

11. Closure/Premature closure

At the time of closure or premature closure, Passbook issued should be collected back and receipt of the amount paid should be obtained in the Passbook. All the pages should be cancelled by drawing lines in red ink followed by dated signatures of authorized official with designation stamp. Passbook should be half torn and preserved as a closed voucher.

(Sigy Thomas Vaidhyan)
Deputy Secretary(Budget)

Signed Copy