QUESTIONS & ANSWERS
RBI notification on premature closure of senior citizens’ deposits
In your answer to the query in The Hindu dated December 1, 2008, relating to premature closure of Senior Citizens Deposit Scheme, you have referred to a Notification No. RBI/ 2006-2007/ 211 dated December 18, 2006. Many senior citizens would like to have the text of the Notification to enable them to convince the bank authorities as to the correct legal position. Can you have it reproduced or arrange to supply the same to myself and other readers on our requisition?
Notification No. RBI/ 2006-07/211 dated December 18, 2006, issued by the Reserve Bank of India being a short one is reproduced below:
Senior Citizens Savings Scheme, 2004 — Payment of interest in case of premature withdrawal — Clarification.
We have been receiving a number of queries regarding broken period interest payable to the depositor in the case of premature withdrawal under Senior Citizens Savings Scheme, 2004. The matter was referred to the Ministry of Finance, which has, vide its letter No. F.15/8/2005/NS-II dated May 11, 2006, clarified that under Rule 9(1)(a)(b) of the scheme, the penalty amount has to be deducted from the amount of deposit at the time of premature withdrawal and, therefore, the penal amount has to be deducted from the principal amount. However, interest at the rate of 9 per cent will have to be calculated on the total amount of deposit till the date of premature closure as the total deposit will be available in the account till that date.
The contents of this circular may be brought to the notice of designated branches of your bank operating the captioned scheme.”
S. RAJARATNAM
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