In order to encourage savings, the government has allowed banks, including top three private sector lenders, to accept deposits under various small savings schemes like National Savings Certificate (NSC), recurring deposits and monthly income plan. Until now, most of the small savings schemes were sold through post offices.
According to a recent government notification, banks can also sell National Savings Time Deposit Scheme 1981, National Savings (Monthly Income Account) Scheme 1987, National Savings Recurring Deposit Scheme 1981 and NSC VIII issue.
As per the notification, all public sector banks and top three in the private sector — ICICI Bank, HDFC Bank and Axis Bank — to receive subscription from the expanded portfolios. So far, these banks were allowed to receive subscription under Public Provident Fund, Kisan Vikas Patra-2014, Sukanya Samriddhi Account, Senior Citizen Savings Scheme-2004.
Increased outlets for selling small savings scheme would result in higher mobilisation under the scheme. Interest rates for small savings schemes are to be notified on a quarterly basis since April 1, 2016.