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PPF Scheme 1968: Deposit Limit Raised to ₹1 Lakh, Loan Interest Rate Increased to 2%, Subscription Interest Set at 8.6%

Current · Source: Reserve Bank of India · RBI/2011-12/291 · issued 05 Dec 2011 · ~2 min read

Quick answerRBI notifies banks of Government amendments to PPF Scheme, 1968 effective Dec 1, 2011: annual deposit limit increased from ₹70,000 to ₹1,00,000, loan interest rate raised from 1% to 2% per annum, and subscription/balance interest rate set at 8.6% per annum.

The rule, in the simplest words

You can now put up to ₹1,00,000 (one lakh rupees) into your PPF (Public Provident Fund, a government savings plan) every year, instead of the old limit of ₹70,000.
If you take a loan against your PPF (borrow money using your PPF savings as security), the interest you pay on that loan is now 2% per year, up from 1%.
The money in your PPF account (your deposits and balance) will earn interest at 8.6% per year starting from December 1, 2011.

How it plays out — a real example

An agency-banking (government business) officer in Indore, Priya, updates her bank's PPF forms to show the new ₹1,00,000 deposit limit. She also tells a customer, Mr. Sharma, that if he takes a loan against his PPF, the interest rate is now 2% per year, and his savings will earn 8.6% interest.

What changed

The annual deposit ceiling under the Public Provident Fund Scheme, 1968 was raised from ₹70,000 to ₹1,00,000. The interest rate on loans against PPF was increased from 1% per annum to 2% per annum. Additionally, the interest rate on PPF subscriptions and balances was fixed at 8.6% per annum for deposits made on or after December 1, 2011.

What it means for you

Banks operating PPF accounts must update their systems and forms to reflect the new deposit limit of ₹1,00,000 and the revised loan interest rate of 2% per annum. The higher deposit cap may encourage more savings under PPF, potentially increasing account activity and balances. Lenders need to ensure accurate interest calculation and disclosure to subscribers.

What you must do

Update PPF account opening forms and system limits to reflect the new maximum annual deposit of ₹1,00,000.
Adjust loan interest rate calculations from 1% to 2% per annum for all PPF loans disbursed on or after December 1, 2011.
Display the amended scheme details on branch notice boards and inform all operating branches.
Train staff on the revised deposit limit and loan interest rate to ensure correct customer guidance.

Who it affects

All scheduled commercial banks operating PPF accounts (including SBI, associate banks, nationalized banks, IDBI Bank, ICICI Bank), PPF subscribers and account holders, Bank branches handling PPF transactions

❓ Common questions

Regulatory timeline

Stated effective date effective Dec 1, 2011
Decoded by BankPulse 2026-06-18 22:36 IST

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

When did the PPF amendments take effect?

The amendments came into force on December 1, 2011, as per the Government notifications dated November 25, 2011.

What is the new interest rate on PPF loans?

The interest rate on loans against PPF has been increased from 1% per annum to 2% per annum, effective December 1, 2011.

Does the 8.6% interest rate apply to existing PPF balances?

Yes, the 8.6% per annum interest rate applies to subscriptions made on or after December 1, 2011, and to balances at the credit of the subscriber as of that date.

📜 Read the original circular — full text as issued by RBI

RBI/2011-12/291
 DGBA.CDD. No. H- 3572/15.02.001/2011-12
 December 05, 2011
 The Chairman and Managing Director/Managing Director
 Government Accounts Department/Head Office
 State Bank of India/State Bank of Patiala/
 State Bank of Bikaner & Jaipur/State Bank of Travancore/
 State Bank of Hyderabad/State Bank of Mysore/ Andhra Bank/
 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/IDBI Bank/ICICI Bank Ltd.
 Dear Sir/Madam,
 Amendment to Public Provident Fund Scheme, 1968 (PPF, 1968) 
 We forward herewith a copy of Government of India  Notifications G.S.R. (E)  &  S.O.(E)  dated November 25, 2011, on the captioned subject, the contents of which are self-explicit.
 2. In this regard, we advise that the contents of the Notifications may be brought to the notice of the branches of your bank operating the PPF, 1968 and may also be displayed on the notice boards of your branches for the information of the PPF, 1968 subscribers.
 Yours faithfully
 (Shrikant Hamine)
 Manager
 Encls: 2
 [TO BE PUBLISHED IN THE GAZETTE OF INDIA: EXTRAORDINARY, PART II – SEC. 3 (II)] 
 New Delhi, the 25th November, 2011
 MINISTRY OF FINANCE 
 (Department of Economic Affairs) 
 NOTIFICATION 
 G.S.R. (E).  – In exercise of the powers conferred by sub-section (4) of  section 3 of the Public Provident Fund Act, 1968 (23 of 1968), the Central Government  hereby makes the following further amendment to the Public Provident Fund Scheme, 1968, namely : -
 1. (1) This Scheme may be called the Public Provident Fund (Amendment) Scheme, 2011.
     (2) It shall come into force on the 1st day of December 2011.
 2. In the Public Provident Fund Scheme, 1968, -

 (i) in paragraph 3, in sub-paragraph (1), for the letters and figures “Rs 70,000/-“, the letters and figures “Rs 1,00,000” shall be substituted;
 (ii)  in paragraph 11, in sub-paragraph (2), for the words “one per cent. per annum”,  the words “two per cent. per annum”, shall be substituted;
 (iii)   in Form-A, in paragraph (iv), for the letters and figures “Rs70,000/-“, the letters and figures “Rs 1,00,000” shall be substituted.
 [F.No. 1/9/2011-NS-II] 
 M.A. Khan, Under Secretary 
 Note :- The Scheme was notified   vide  notification G.S.R.1136(E), dated 15.06.1968 and amended vide G.S.R. 368 (E), dated 1.8.72, G.S.R. 217(E) dated 9.3.79,  G.S.R. 271(E), dated 16.3.83, G.S.R. 54 (E), dated 7.2.84, G.S.R. 895(E), dated 23.6.86, G.S.R.1013 (E), dated 20.8.86, G.S.R.793 (E), dated 29.8.89, G.S.R. 477(E), dated 25.5.94, G.S.R. 489(E) dated 6.7.99, G.S.R. 908 (E) dated 6.12.2000, G.S.R. 679 (E), dated 4.10.2002, G.S.R.768(E), dated 15.11.2002, G.S.R. 585 (E), dated 25.7.2003, G.S.R.690 (E) dated 27.8.2003, G.S.R.755(E), dated 19.11.2004, G.S.R.291(E), dated 13.5.2005 and G.S.R.956(E), dated 7.12.2010.
 [TO BE PUBLISHED IN THE GAZETTE OF INDIA: EXTRAORDINARY, PART II – SEC. 3 (II)] 
 New Delhi, the 25th November, 2011
 MINISTRY OF FINANCE 
 (Department of Economic Affairs) 
 NOTIFICATION 
 S.O. (E).  – In pursuance of section 5 of the Public Provident Fund Act, 1968 (23 of 1968), the Central Government  hereby notifies that the subscriptions made to the fund on or after the 1st day of December, 2011 and balances at the credit of the subscriber shall bear interest at the rate of 8.6 per cent. per annum.
 [F.No. 1/9/2011-NS-II] 
 M.A. Khan, Under Secretary 
 Note :- The Principal notification was published in the Gazette of India vide number S.O.48(E) dated 15th January, 2000 and subsequently amended vide S.O.192 (E) dated 1st March 2011, S.O.271 (E) dated 1st March, 2002 and S.O. 250(E) dated 1st March, 2003.

Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2011-12/291 · issued 05 Dec 2011. The plain-English explanation above is BankPulse’s own independent summary.

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Who does what — compliance checklist

🏦 Branch Manager

Update PPF account opening forms and system limits to reflect the new maximum annual deposit of ₹1,00,000.
Display the amended scheme details on branch notice boards and inform all operating branches.

📜 Compliance

Adjust loan interest rate calculations from 1% to 2% per annum for all PPF loans disbursed on or after December 1, 2011.
Train staff on the revised deposit limit and loan interest rate to ensure correct customer guidance.

Grouped from the action items above — a single circular may involve more than one team.

Worked example & action-note template

Example: if you are a Branch Manager at a bank this circular applies to (All scheduled commercial banks operating PPF accounts (including SBI, associate banks, nationalized banks, IDBI Bank, ICICI Bank), PPF subscribers and account holders, Bank branches handling PPF transactions), your first concrete step on “PPF Scheme 1968: Deposit Limit Raised to ₹1 Lakh, Loan Interest Rate Increased to 2%, Subscription Interest Set at 8.6%” is: “Update PPF account opening forms and system limits to reflect the new maximum annual deposit of ₹1,00,000.” (RBI issued this 05 Dec 2011).

Circular: RBI/2011-12/291 -- PPF Scheme 1968: Deposit Limit Raised to ₹1 Lakh, Loan Interest Rate Increased to 2%, Subscription Interest Set at 8.6%
Issued: 05 Dec 2011
Action required: Update PPF account opening forms and system limits to reflect the new maximum annual deposit of ₹1,00,000.
Action required: Adjust loan interest rate calculations from 1% to 2% per annum for all PPF loans disbursed on or after December 1, 2011.
Action required: Display the amended scheme details on branch notice boards and inform all operating branches.
Action required: Train staff on the revised deposit limit and loan interest rate to ensure correct customer guidance.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________

Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.

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BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly).
Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=6858&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.