What changed
The Government of India amended the Public Provident Fund Scheme, 1968 via Notification G.S.R.755(E) dated November 19, 2004. First, paragraph 4(4) was replaced to allow subscriptions in cash, crossed cheque, draft, or pay order. Second, a new sub-paragraph 12(7) was inserted stating that a subscriber cannot nominate a trust as a nominee.
What it means for you
Banks must update their PPF account opening and transaction procedures to accept the specified payment instruments and ensure nomination forms exclude trusts. This clarifies payment flexibility while tightening nominee eligibility, reducing potential disputes. Banks should train staff and update system validations accordingly.
What you must do
- Issue instructions to all designated PPF branches to implement the amended payment methods (cash, crossed cheque, draft, pay order).
- Update nomination forms and system checks to prevent trusts from being nominated as PPF nominees.
- Display the amendments on notice boards at all authorized branches and inform existing PPF account holders.
- Acknowledge receipt of this circular to RBI as instructed.
Who it affects
State Bank of India and associate banks, 14 nationalised banks, Corporation Bank, All designated PPF branches and offices, PPF account holders
Can I now pay my PPF subscription via a pay order?
Yes, the amendment to paragraph 4(4) allows subscriptions via cash, crossed cheque, draft, or pay order, effective November 19, 2004.
Can I nominate a trust for my PPF account?
No, the new sub-paragraph 12(7) explicitly prohibits nominating a trust as a nominee for a PPF account.
When did these PPF amendments take effect?
The amendments came into force on the date of publication in the Official Gazette, i.e., November 19, 2004.