Kisan Vikas Patra (KVP)

Kisan Vikas Patra (KVP)

In Union Budget 2014 presentation speech the Finance informed the re-introduction of KVP. 

KVP certificates could be purchased from post offices, State Bank of India and its associate banks, Nationalized banks etc  in cash, cheuqe, draft in denominations of Rs 1,000, Rs 5,000, Rs 10,000 and Rs 50,000. It could be transferred from one person to another or one bank to another bank or one post office another easily.  These certificates can be purchased singly, jointly or in the name of minor also. Nomination facility is also available.  The investment will become doubled on maturity..  The investment will be doubled in eight years four months. That means Rs. 1,000.00 will become Rs. 2,000.00 in eight years four months. The annual compounded interest worked out around 8.60%.  The pre-mature withdrawal is also allowed    

Table showing premature encashment value of Certificate - Denomination of Rs.1,000/-

(Amount in Rs.)

TABLE

After

Amount payable

(1)

(2)

2and half years but less than 3 years

1201

3 years but less than 3 and half years

1246

3 and half years but less than 4 years

1293

4 years but less than 4 and half years

1341

4 and half years but less than 5 years

1391

5 years but less than 5 and half years

1443

5 and half years but less than 6 years

1497

6 years but less than 6 and half years

1553

6 and half years but less than 7 years .

1611

7 years but less than 7 and half years

1671

7 and half years but less than 8 years

1733

8 years but before the maturity of the Certificate

1798

On maturity of Certificate

2000

Therefore, apart from the convenience of investing; KVP doesn't really offer any interest rate benefit or tax advantage.

 

KISAN VIKAS PATRA RULES, 2014

NOTIFICATION NO. GSR 705(E) [F.NO.2/4/2014-NS-II], DATED 23-9-2014

In exercise of the powers conferred by section 12 of the Government Savings Certificates Act, 1959 (46 of 1959) and in supersession of the Kisan Vikas Patra Rules, 1988 except as respects things done or omitted to be done before such supersession, the Central Government hereby makes the following rules, namely:—

Short title and commencement.

1. (1) These rules may be called the Kisan Vikas Patra Rules, 2014

(2)They shall come into force on the day of their publication in the Official Gazette.

Definitions.

2. In these rules, unless the context otherwise requires,—

(a)

 

"Act" means the Government Savings Certificates Act, 1959 (46 of 1959);

(b)

 

"cash" means the cash in Indian currency;

(c)

 

"Certificate" means the Kisan Vikas Patra;

(d)

 

"Form" means a Form annexed to these rules;

(e)

 

"Post Office" means any departmental post office in India doing Savings Bank work;

(f)

 

"Bank" means any branch of State Bank of India and its associate banks, designated branches of Nationalised and other commercial banks, authorized for Public Provident Fund Scheme;

(g)

 

words and expressions used herein and not defined but defined in Post Office Savings

Certificate Rules, 1960 shall have the meanings respectively assigned to them in those rules.

Application of Post Office Savings Certificate Rules, 1960.

3. The provisions of the Post Office Savings Certificate Rules, 1960 shall, so far as may be, apply in relation to matters for which no provision has been made in these rules.

Denomination of Certificates.

4. The Kisan Vikas Patra shall be issued in denominations of Rs. 1,000/-, Rs. 5,000/-, Rs. 10,000/- and Rs. 50,000/-.

Purchase of Certificate.

5. Any number of Certificates of the denominations specified in rule 4 may be purchased.

Type of Certificates and issue thereof.

6. (1) The Certificates shall be of the following types, namely :—

(a)

 

Single holder type Certificates;

(b)

 

Joint 'A' type Certificates; and

(c)

 

Joint 'B' type Certificates.

(2) (a) A single holder type Certificate may be issued to -(a) an adult for himself or on behalf of a minor or to a minor;

(b) A Joint 'A' type Certificate may be issued jointly to two adults payable to both holders jointly or to the survivor.

(c) A Joint 'B' type Certificates may be issued jointly to two adults payable to either of the holders or to the survivor.

Procedure for purchase of Certificate.

7.(1) Any person or persons specified in rule 6, desiring to purchase a Certificate, shall present an application in a Form A either in person or through an authorised agent of the small savings schemes at a Post Office or Bank.

(2) Payment for the purchase of a Certificate may be made to a Post Office or Bank in any of the following modes, namely:—

(i)

 

by cash; or

(ii)

 

by locally executed cheque, pay order or demand draft drawn in favour of the Post Master; or

(iii)

 

by presenting a duly signed withdrawal form or cheque together with the passbook for withdrawal from Savings Account standing in credit of the purchaser at the same Post Office or Bank.

Issue of Certificates

8. (1) On payment being made under rule 7, except where payment is made by a cheque, pay order or demand draft, a Certificate shall be issued immediately and the date of such Certificate shall be the date of payment.

(2) Where payment for the purchase of a Certificate is made by cheque, pay order or demand draft, the Certificate shall not be issued before the proceeds of the cheque, pay order or demand draft, as the case may be, are realised and the date of such Certificate shall be date of encashment of the cheque, pay order or demand draft, as the case may be.

(3) If, for any reason a Certificate cannot be issued immediately, a provisional receipt shall be given to the purchaser which may later be exchanged for a Certificate and in such a case the date of Certificate shall be the date of provisional receipt.

Transfer from Post Office to Bank and vice-versa

9.(1) A Certificate may be transferred from a Post Office or Bank at which it stands registered, to any other Post Office or Bank to the holder or holders making an application in Form B either at Post Office or Bank.

(2) Every such application shall be signed by the holder or holders of the Certificate :

Provided that in the case of Joint 'A' type Certificate or Joint 'B' type Certificate, the application may be signed by one of the joint holders if the other is dead.

Transfer of Certificate from one person to another

10.(1) A Certificate may be transferred from one person to another with the consent in writing to an officer of the Post Office or Bank as specified in the Table below (hereinafter referred to in these rules as authorised Post Master or Bank Officer) :—

TABLE

Cases in which transfer can be sanctioned

Designation of the Officer competent to grant permission for transfer

(1)

(2)

(a.)(i) From the name of a deceased holder to his heir.

Post Master of the Post Office or Bank Officer of the branch, where the Certificates stands registered.

(ii) From a holder to a court of law or to any other person under the orders of court of law.

-do-

(iii) From a single holder to the names of joint holders of whom the transferee shall be one

-do-

(iv) From Joint holders to the name of one of the joint holders.

-do-

(b) From single or joint holders to another person.

 

(2) An authorised Post Master or Bank Officer referred to in sub-rule (1) shall give his consent to the transfer of a Certificate only if the following conditions are satisfied, namely:—

(a)

 

the transferee is eligible under these rules to purchase Certificates;

(b)

 

the transfer is made after the expiry of a period of at least one year from the date of purchase of the Certificate or where the transfer is sought before the expiry of such period, the transfer falls under any of the following categories, namely:—

 

(i)

 

transfer in the name of the heir or nominee of the deceased holder;

(ii)

 

transfer from a holder to a court of law or to any other person under the orders of the court of law;

(iii)

 

transfer in accordance with rule 11;

(iv)

 

transfer in the name of the survivor in the event of death of one of the joint holders;

 

(c)

 

an application for transfer is made in Form B and is signed by the holder or holders of the Certificate:

Provided that in the case of Joint 'A' type Certificate or a Joint 'B' type Certificate, the application may be signed by one of the holders, if the other is dead.

(3) No transfer shall be permitted in respect of a Certificate held by or on behalf of a minor till the minor is alive.

(4) In every case of transfer, other than a transfer under rule 11, the original Certificate shall be duly discharged and the new Certificate bearing the same date as that of the original Certificate surrendered shall be issued in the name of the transferee.

(5) Transfer of Certificate from one person to another under this rule shall be permissible.

Pledging of Certificates

11. (1) On an application being made in Form B by the transferor and the transferee, the Post Master or Bank Officer of the office of the registration may, at any time, permit the transfer of any Certificate as security to—

(a)

 

the President of India or Governor of a State in his official capacity;

(b)

 

the Reserve Bank of India or a Scheduled Bank or a Co-operative Society including a Co-operative Bank;

(c)

 

a Corporation or a Government company;

(d)

 

a local authority; and

(e)

 

a Housing Finance Company approved by the National Housing Bank and notified by the Central Government:

Provided that the transfer of a Certificate purchased on behalf of a minor shall not be permited under this sub-rule unless the parent or the guardian of the minor referred to in sub-clause (i) or as the case may be, sub-clause (ii) of clause (b) of section 5 of the Act, for the benefit of the minor.

(2) When any Certificate is transferred as security under sub-rule (1), the Post Master or Bank Officer of the office of the registrartion shall make the following endorsement on the Certificate, namely:—

'Re-transferred to..........'.

Nomination.

12. (1) Subject to the provisions of sub-rules (2) to (6), the single holder or joint holders of a Certificate may on filling necessary particulars in Form C at the time of purchasing the Certificate, nominate any person who, in the event of death of the single holder or both the joint holders, as the case may be, shall become entitled to the Certificate and to the payment of the amount due thereon and if such nomination is not made at the time of purchasing the Certificate, it may be made by the single holder, the joint holders or the surviving joint holder, as the case may be, at any time after the purchase of the Certificate but before its maturioty, by means of an application in Form C to the Post Master or Bank Officer of the office at which the Certificate stands registered.

(2) No nomination shall be made in respect of a Certificate applied for and held by or on behalf of a minor.

(3) A nomination made by the holder or holders of a Certificate under this rule may be cancelled or varied bv submitting an application in Form D.

(4) Separate application for nomination, cancellation of nomination or variation of nomination shall be made in respect of Certificates registered on different dates.

(5) The nomination or cancellation of a nomination or variation of a nomination shall be effective from the date it is registered in the post office, which shall be noted on the Certificate.

(6) No fee shall be charged for the nominations made first time, but a fee of Rs. 20/- per subsequent nomination or cancellation shall be charged by the Post Office or Bank.

Post maturity interest.

13. Where repaypment of the amount, inclusive of interest, under the rule 16 has become due but has not been made, interest shall be allowed on the amount due on the date of repayment of the amount subject to the following conditions, namely:—

(a)

 

the interest shall be simple and shall be calculated at the rate applicable from time to time to Post Office Savings Accounts of the type of single or joint account;

(b)

 

for the purpose of payment of interest, any part of the period which is less than one month shall be ignored;

(c)

 

the interest shall be paid to the depositor in lump sum at the time of repayment of the amount due.

Replacement of lost or destroyed Certificate.

14. (1) If a Certificate is lost, stolen, destroyed, mutilated, the person entitled thereto may apply for the issue of a duplicate Certificate to the Post Office or Bank of issue.

(2) Where an application under sub-rule (1) has been made to a Post Office or Bank other than the Post Office or / Bank of issue, the said Post Office or Bank shall forward such application to the Post Office or Bank of issue.

(3) Every application under sub-rule (1) shall be accompanied by,—

(a)

 

a statement showing particulars, such as number, amount and date of the Certificate and the circumstances of such loss, theft, destruction, mutilation or defacement;

(b)

 

identity slip, if any.

(4) If the Post Master of the Post Office or Bank Officer of the branch of issue is satisfied as to the loss, theft, destruction, mutilation or defacement of the Certificate, he shall issue a duplicate Certificate on the applicant's furnishing an indemnity bond in the form laid down by the Department of Posts or Bank with two sureties or with a bank's guarantee:

Provided that where such application is made with respect to a Certificate mutilated or defaced, a duplicate Certificate may be issued without any such indemnity bond, surety or guarantee, if the Certificate mutilated or defaced is surrendered and the Certificate is capable of being identified as the one originally issued.

(5) A duplicate Certificate issued under sub-rule (4) shall be treated as equivalent to the original Certificate for all the purposes, except that it shall not be encashable at a Post Office or Bank other than the Post Office or Bank of issue without previous verification.

Place of encashment

15. A Certificate shall be encashable at the Post Office or Bank of its Issue:

Provided that a Certificate may be encashed at any other Post Office or Bank if the Officer-in-Charge of that Post Office or Bank is satisfied on verification from the Post Office or Bank of issue that the person presenting the Certificate for encashment is entitled thereto.

Encashment on maturity.

16. (1) The maturity period of a Certificate of any denomination shall be eight years and four months commencing from the date of issue of the Certificate.

(2) The amount inclusive of interest, payable on encashment of a Certificate at any time after the expiry of its maturity period shall be Rs. 2000 for denomination of Rs. 1000 and at proportionate rate for any other denomination.

Premature encashment.

17.(1) Notwithstanding anything contained in rule 16, a Certificate may be prematurely encashed any time under the following circumstances, namely :—

(a)

 

on the death of the holder or any of the holders in the case of a joint holder;

(b)

 

on forfeiture by a pledge being a Gazetted Government officer;

(c)

 

when ordered by a court of law.

(2) If a Certificate is encashed under sub-rule (1) face value of the Certificate, together with simple interest calculated at the rate applicable from time to time to accounts under Post Office Savings Account Rule, 1981 for the complete months for which the Certificate has been held, shall be payable.

(3) Notwithstanding anything contained in rule 16 or in sub-rule (1), if a Certificate is encashed any time after expiry of two years and six months from the date of issue of Certificate, the amount payable inclusive of interest shall be as specified in the Table below for denomination of Rs. 1000/- and at a proportionate rate for any other denomination :—

Table showing premature encashment value of Certificate - Denomination of Rs.1,000/-

(Amount in Rs.)

TABLE

After

Amount payable

(1)

(2)

2and half years but less than 3 years

1201

3 years but less than 3 and half years

1246

3 and half years but less than 4 years

1293

4 years but less than 4 and half years

1341

4 and half years but less than 5 years

1391

5 years but less than 5 and half years

1443

5 and half years but less than 6 years

1497

6 years but less than 6 and half years

1553

6 and half years but less than 7 years .

1611

7 years but less than 7 and half years

1671

7 and half years but less than 8 years

1733

8 years but before the maturity of the Certificate

1798

On maturity of Certificate

2000

Discharge of Certificate.

18. (1) The person entitled to receive the amount due under a Certificate shall, on its encashment, sign on back thereof in token of having received the payment.

(2) In the case of a Certificate purchased on behalf of a minor who has since attained majority, the Certificate shall be signed by such a person himself or herself but his or her signature shall be attested either by the person who is known to the Post Master or Bank Officer.

Rectification of mistakes.

19. The Post Master General of a Postal Circle or the Regional or Zonal Manager of the Bank, in their respective jurisdictions, may either suo-motu or upon an application" by any person interested in any Certificate issued in pursuance of these rules, rectify any clerical or arithmetical mistakes with respect to that Certificate, provided that it does not involve any financial loss to the Government or to any such person.

Power to relax.

20. Where the Central Government is satisfied that the operation of any of the provisions of these rules causes undue hardship to the holder or holders of a Certificate, it may, by order, for reasons to be recorded in writing, relax the requirements of that provision in a manner not inconsistent with the provisions of the Act.

Form A

[See rule 7(1)]

FORM OF APPLICATION FOR PURCHASE OF KISAN VIKAS PATRA

 

Form B

[See rules 9(1), 10(2(c)]

Form of Application for Transfer of Certificate from Post Office to a Bank and Vice-versa

 

Form C

[See rule 12(1)]

Form of Application for Nomination

 

Form D

[See rule 12(3)]

Form of application for cancellation or variation of nomination

 

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