Money & Banking

No PAN requirement for investment in Kisan Vikas Patra

Shishir Sinha New Delhi | Updated on November 18, 2014

Finance Minister Arun Jaitley and Communications and IT Minister Ravi Shankar Prasad at the launch of revamped Kisan Vikas Patra in New Delhi on Tuesday. Kamal Narang

Arun Jaitley, Finance Minister, launching the Kisan Vikas Patra along with Ravi Shankar Prasad (right), Union Minister for Communications and IT, and Rajiv Mehrishi, Secretary, Finance, in New Delhi on November 18, 2014.   -  Kamal Narang

KVP was a popular saving scheme that doubled the money invested in eight years and seven months

Investment in KVP will double in 8 years and 4 months

The Finance Ministry has said that there will not be requirement of Permanent Account Number or PAN in puttig money in relaunched Kisan Vikas Patra. There will also not be any upper limit on investment.

The Finance Minister Arun Jaitley and Communication Minister Ravi Shankar Prasad relaunched KVP on Tuesday. The scheme aims to boost saving and use them for long term capital requirement. "This will be a bearer instrument just like currency and easy to encash," he said.

In view of the popular demand and to revitalize Small Savings, the Finance Minister in his Budget Speech announced that KVP a very popular instrument among small savers will be reintroduced. The instrument will encourage people, who may have banked and unbanked savings to invest”. KYC norms regarding all National Savings Schemes (NSS) are now applicable in post offices and banks w.e.f. January, 2012.

It will be available to the investors in the denomination of Rs. 1000, Rs 5,000, Rs 10,000 and Rs 50,000, with no upper ceiling on investment. The certificates can be issued in single or joint names and can be transferred from one person to any other person / persons, multiple times. The facility of transfer from one post office to another anywhere in India and of nomination will be available. The certificate can also be pledged as security to avail loans from the banks and in other case where security is required to be deposited.

Initially the certificates will be sold through post offices, but the same will soon be made available to the investing public through designated branches of nationalised banks. An investor can encash his certificates after the lock-in period of 2 years and 6 months and thereafter in any block of six months on pre-determined maturity value. The investment made in the certificate will double in 100 months.

The scheme will also safeguard small investors from fraudulent schemes. With a maturity period of 8 years 4 months, the collections under the scheme will be available with the Government for a fairly long period to be utilized in financing developmental plans of the Centre and State Governments and will also help in enhancing domestic household financial savings.

Earlier, it was launched by the Government on April 1, 1988. The scheme provided facility of unlimited investment by way of purchase of certificates from post offices in various denominations. The maturity period of the scheme when launched was 5 ½ years and the money invested doubled on maturity.

The scheme was very popular among the investors and the percentage share of gross collections secured in KVP was in the range of 9 per cent to 29 per cent against the total collections received under all National Savings Schemes in the country.

Gross collections under the scheme in the year 2010-11 were Rs. 21,631.16 crore which was 9 per cent of the total gross collections during the year. In the year of its closure, the scheme secured gross collections of Rs 7,575.95 crore (April 2011 to November 2011).

Published on November 18, 2014

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