The Union Finance Ministry has allowed banks, including top three private sector lenders to accept deposits under various small savings schemes in order to encourage savings.
Until now, most of the small savings schemes were sold through post offices. This decision will allow increase outlets for selling small savings scheme that will result in higher mobilisation under scheme.
Now banks are eligible to sell National Savings Time Deposit Scheme 1981, National Savings (Monthly Income Account) Scheme 1987, National Savings Recurring Deposit Scheme 1981 and NSC VIII issue. All public sector banks (PSBs) and top three in the private sector viz. ICICI Bank, HDFC Bank and Axis Bank can receive subscription from the expanded portfolios. So far, these banks were allowed to receive subscription under Public Provident Fund (PPF), Kisan Vikas Patra-2014, Sukanya Samriddhi Account, Senior Citizen Savings Scheme-2004.
Small saving schemes
Small Savings Schemes are government run social welfare schemes that provide higher interest rate. These schemes are meant for small investors backed by a sovereign guarantee and tax benefits