What changed
RBI issued a circular on August 30, 2007, based on a Government of India Office Memorandum dated August 6, 2007, clarifying that PPF accounts of missing subscribers should be settled under Section 107/108 of the Indian Evidence Act, 1872. Previously, there was no specific provision in the PPF Act/Scheme for such cases. The new rule requires a court presumption of death after seven years of being missing.
What it means for you
Banks handling PPF accounts must now follow a legal process for missing subscribers: nominees must obtain a court order presuming death under the Indian Evidence Act. This ensures uniformity and legal clarity, but adds a procedural step for claimants. Banks should update their internal guidelines and train staff on this requirement.
What you must do
- Inform all designated branches about this circular and the attached Office Memorandum.
- Train staff to handle PPF claims of missing subscribers only after receiving a court order under Section 107/108 of the Indian Evidence Act.
- Ensure nominees are guided to approach a competent court after seven years of the subscriber being missing.
- Maintain records of such claims and court orders for audit and compliance.
Who it affects
State Bank of India and its Associates, Allahabad Bank, Bank of Baroda, Bank of India, Bank of Maharashtra, Canara Bank, Central Bank of India, Corporation Bank, Dena Bank, Indian Bank, Indian Overseas Bank, Punjab National Bank, Syndicate Bank, UCO Bank, Union Bank of India, United Bank of India, Vijaya Bank, ICICI Bank Ltd, All designated branches handling PPF accounts
What happens if a PPF subscriber goes missing?
The nominee must wait for seven years from the date the subscriber was reported missing. Then, they need to approach a competent court to get a presumption of death under Section 108 of the Indian Evidence Act. Only after the court order can the bank settle the PPF claim.
Is there any direct provision in the PPF Scheme for missing subscribers?
No, the PPF Act/Scheme did not have a specific provision. The Government of India, after consulting the Ministry of Law, advised using the Indian Evidence Act, 1872, Sections 107 and 108, to handle such cases.
Which banks are affected by this circular?
All banks handling PPF accounts, including State Bank of India and its associates, major public sector banks like Punjab National Bank, Canara Bank, and private sector banks like ICICI Bank, as listed in the circular.