Now, NRIs can be nominees for PPF, NSC

The government has made several major changes providing relief to investors in small savings schemes. The Ministry of Finance has issued a notification stating that now non-resident Indians (NRIs) can be nominated for government savings schemes like Postal Public Provident Fund (PPF) and National Savings Certificate (NSC).

According to media reports, the government has also allowed applicants to change their name or nickname. These changes have been made under the modified general rules of the notified government savings. The schemes covered include Public Provident Fund (PPF) under the Government Savings Promotion Act, 1873, National Savings Certificate (NSC), Sukanya Samriddhi Yojana (SSY), Senior Citizen Savings Scheme (SCSS), Mahila Samman Yojana, Kisan Vikas Patra (KVP), and Monthly Income Scheme (MIS).

Relief for NRIs
NRIs were not allowed to invest in small savings schemes in India. But the government has been considering allowing them to be nominated in these schemes. Now, after a long wait, the government has granted permission for NRIs to be nominated in small savings schemes. However, they will have to fulfil certain conditions to receive payments.

Change in name and nickname
Futher, another amendment allows account holders to change their name or nickname. According to the notification, the Reserve Bank of India (RBI) will authorise the process for changing the name or nickname associated with the savings scheme account. If someone wants to make changes to their name or nickname, they can do so based on legal documents. They will need to submit an application stating that the name or nickname has been legally changed. The application for name correction can be written as a bank statement or in the form of other formal letters.

Changes in the Account
Under the previous rules, an account that was opened as an individual account could not be later converted into a joint account or vice versa. However, now a provision has been added to allow the conversion of a joint account into an individual account in the event of the death of the account holder.

Minor’s account
Currently, an adult can open an account in the name of a minor by submitting proof of the child’s age. For this, the account holder needs to submit a passport-sized photograph. However, now only an updated passport-sized photograph of the guardian will be required.

Payments in case of death
According to the notification, there have been changes in the criteria related to payments in case of the depositor’s demise. If the amount exceeds 5 lakh rupees, payments will be made based on the succession or inheritance certificate, along with other documents. If there is no nominated person, and the nominee or legal heir certificate or succession certificate is not submitted within six months from the date of death, the rightful claimant will have to fill out Form 11. They will need to submit the account holder’s death certificate, original passbook or deposit receipt, an affidavit, indemnity bond, and identity proof.

In case of a dispute, the claimant will have to submit a claim form, passbook or deposit receipt or original account details, account holder’s death certificate, and identity proof along with the legal heir certificate issued by the court. Only after this, the claimant will receive the payment.