Follow senior citizen scheme strictly, RBI advises banks

Follow senior citizen scheme strictly, RBI advises banks

RBI has found that some of the banks do not implement Senior Citizens Savings Scheme - 2004(SCSS), particularly in case of retired army personnel and have denied the facility of SCSS to some of them in contravention of the instructions ibid.

“We, therefore, reiterate that you may strictly adhere to the instructions issued vide our above circular and ensure extending  the benefits of the scheme to retired army personnel also, if otherwise found in order,” the RBI said in a notification.

The scheme can be availed by people of 60 years or above. However, persons retiring from defence services are given a relaxation of five years in age availing this scheme. The scheme is operated through all branches of public sector banks which are operating PPF Scheme.

Under the SCSS, the deposit made will earn an interest rate of 9 per cent per annum and interest is paid on quarterly basis. In another notification, RBI allowed banks to continue practice of keeping aside 5 per cent of the restructured accounts by their rural branches for another two years.

This facility was given to back rural branches which lacked expertise or appropriate infrastructure to ensure computation of diminution in the fair value of advances extended by their small or rural branches.

Such banks were given the option of notionally computing the amount of diminution in the fair value and providing therefor at 5 per cent of the total exposure in respect of all restructured accounts where the total dues are less than Rs 1 crore till the financial year ending March 2011. “On a review, it has been decided... (it) will remain applicable...till the financial year ending March 31, 2013,” the Central bank said.

 

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