Central

Section 3A of The Government Savings Promotion Act, 1873

Framing of Savings Schemes.

1[3A. Framing of Savings Schemes.--(1) The Central Government may, by notification in the Official Gazette, frame new Savings Schemes or amend or discontinue existing Savings Schemes to promote household savings in the country.

(2)The Central Government may, by notification in the Official Gazette, include or omit or amend Savings Schemes in the Schedule.
(3)The notification referred to in sub-section (1) may include any or all of the following provisions, depending on the design of such Scheme, namely:--
1. (a)the persons who shall be eligible to make deposit in a Savings Scheme;
2. (b)the terms and conditions subject to which deposit may be made;
3. (c)the manner of calculation, frequency of payment and rate of interest payable on the deposit;
4. (d)the maximum and minimum limits of deposit;
5. (e)premature closure, withdrawal of deposit, grant of loans against deposit and transfer of deposit;
6. (f)any other provision depending on the purpose and design of the Savings Scheme.]

Summary

The Central Government has the power to create, change, or stop Savings Schemes.
They must do this by publishing a notification in the Official Gazette.
The government can also add or remove schemes from the Schedule attached to the Act.
These rules can specify who is eligible to deposit, interest rates, deposit limits, and rules for early withdrawal.

Practical examples

1On October 1, 2024, the Central Government publishes a notice in the Official Gazette to increase the maximum deposit limit for a savings scheme.

2The government decides to discontinue an old scheme and removes it from the Schedule by releasing a new public notification in the Gazette.

FAQ

1. Who has the legal authority to frame new savings schemes?

The Central Government holds this authority.

2. How does the government announce changes to a scheme?

They announce changes by publishing a notification in the Official Gazette.

3. Can the government change the interest rate on my deposit?

Yes, the government can include provisions for the manner of calculation and rate of interest payable.

4. Why does the government create these schemes?

The section states the main purpose is to promote household savings in the country.

Test yourself

Q1.Under Section 3A of The Government Savings Promotion Act, 1873, which entity has the power to frame new Savings Schemes?

Q2.Under Section 3A of The Government Savings Promotion Act, 1873, how must the government legally announce a new savings scheme?

Q3.According to Section 3A of The Government Savings Promotion Act, 1873, what is the stated purpose for framing new Savings Schemes?

Q4.Which of the following is NOT listed in Section 3A of The Government Savings Promotion Act, 1873 as a provision the government can include in a notification?

Q5.Based on Section 3A of The Government Savings Promotion Act, 1873, can the government grant loans against a deposit?

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