All existing protections retained while consolidating PPF Act: Finance Ministry

The central government on Wednesday said that "all existing protections" have been retained while consolidating the Public Provident Fund (PPF) Act under the proposed Government Savings Promotion Act.

The development comes a day after the central government proposed to merger separate acts on small savings, PPF and government savings banks.

"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 Ministry of Finance said in a statement.

"... It is made clear that there is no proposal to withdraw the said provision and the existing and future depositors will continue to enjoy protection from the attachment under the amended umbrella Act as well."

On Tuesday, the ministry said that the changes proposed are aimed at adding flexibility in the operations of under the Small Savings Schemes.

Apart from ensuring existing benefits, certain new benefits to the depositors have been proposed under the bill, the ministry had said in another statement on Tuesday.

"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 savings schemes, and also to introduce certain flexibilities for investors," it had said.

Besides, benefits of premature closure of Small Savings Schemes would be introduced to deal with medical emergencies and higher education needs among others, it said.

The bill also proposes permitting depositor to close a PPF account before five years in exigencies. At present, such accounts cannot be closed prematurely before completion of five financial years.

The amendments proposed would also allow the government to put in place a mechanism for redressal of grievances and for amicable and expeditious settlement of disputes relating to Small Savings.

--IANS

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