The number of new small saving schemes (Public Provident Fund, National Saving Certificate etc) is coming down, the Finance Ministry disclosed in the Lok Sabha on Monday. It added that that number of demat accounts (mandatory to invest in stocks) has more than doubled in 3 years and 7 months.

In a written reply, the Minister of State in the Finance Ministry, Pankaj Chaudhary, gave details about new accounts under small saving schemes. In the year 2018-19, they numbered 4.66 crore, which came down to 4.12 crore next year and further slipped to 4.11 crore in 2020-21. In the current fiscal (2021-22), till November, a total of 2.33 crore new small saving accounts have been opened.

Sukanya Samridhi sees rise

The decline has been mainly on account of two schemes, Post Office Saving Accounts and Senior Citizen Savings Scheme, both of which saw a continuous decline in new openings. However, Sukanya Samridhi Scheme has recorded increase on continuous basis.

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All these have happened even when interest rate is stable and recorded no change since April 1, 2020. These rates, in many cases, have been higher than bank deposits of similar maturity. Most of these schemes also offer tax benefits.

Interest rate resetting

The small savings schemes basket comprises 12 instruments including the National Saving Certificate (NSC), Public Provident Fund (PPF), Kisan Vikas Patra (KVP) and Sukanya Samridihi Scheme. The government resets interest rates at the beginning of every quarter.

Theoretically, since 2016, interest rate resetting has been done based on yields of government securities of the corresponding maturity with some spread on the scheme for senior citizens, as advised by the Shyamala Gopinath Committee. However, in practice, interest rate changes are made considering several other factors, including political ones.

Chaudhury also clarified there is no proposal to bring in any new small saving scheme for senior citizens and weaker classes.

Demat accounts rise

In response to another question, Chaudhary said in a written reply that the number of demat accounts was 3.59 crore at the end of fiscal year 2018-19. It rose to 4.06 crore next year and further to 5.51 crore in the successive fiscal year. It reached 7.38 crore at the end of October 2021.

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“As per information provided by the Securities and Exchange Board of India (SEBI), as on October 31, 2021, there are around 2.75 crore mutual fund investors, 7.38 crore demat account holders and 1,324 SEBI registered investment advisors (RIA). The ratio of mutual fund investors and demat account holders to the registered investment advisors (RIA) in India is around 76,510:1,” he said.

‘No bank staff shortage’

Earlier, in a written reply, Finance Minister Nirmala Sitharaman had denied that there is huge shortage of staff in public sector banks (PSBs).

According to her, as per inputs received from public sector banks, as on December 1, 95 per cent staff is in position against the sanctioned staff strength. The small proportion of vacancies is substantially attributable to attrition on account of superannuation and other usual factors.

“As on December 1, there are 8,05,986 sanctioned posts and 41,177 vacant posts in public sector banks. No post/vacancy has been abolished during the last six years in all Public Sector Banks except one post in Punjab & Sind Bank in 2016,” she said

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