PPF_Loan_Withdrawal

PUBLIC PROVIDENT FUND - LOANS AND WITHDRAWALS

LOAN:

(i) At any time after the expiry of one year from the end of the year in which the initial subscription was made (year of opening of account) but before expiry of five years from the end of the year in which the initial subscription was made, the account holder may, apply in application for Loan (SB-7C) at the post office for obtaining a loan consisting of a sum of whole rupees not exceeding twenty-five per cent. of the amount that stood to his/her credit at the end of the second year immediately preceding the year in which the loan is applied for. i.e. if the account is opened during the financial year 2018-19, the first loan can be taken during the financial year 2020-21. The amount of loan will be restricted to 25% of the balance in the account as on 31.3.2019

(ii) In case of an account opened on behalf of a minor or a person of unsound mind, the guardian may apply for the loan by submitting the following certificate in loan form (SB-7C), namely:

“Certified that the amount sought to be withdrawn is required for the use and welfare of Shri/Smt./Master/ Kumari.................................. who is a minor/ a person of unsound mind/ a person incapable of operating his/her account due to physical infirmity and is alive on this......the day of ............. (month) , .......... (year).”.

(iii) An account holder shall not be entitled to get a fresh loan so long as earlier loan has not been repaid in full together with interest thereon.

(iv) An account holder shall be entitled for only one loan in a financial year.

(v) No loan can be obtained after the end of 5th year following the expiry of the year in which the account was opened.

Repayment of loan and interest

(i) The principal amount of a loan shall be repaid by the account holder before the expiry of thirty-six months from the first day of the month following the month in which the loan is sanctioned, provided that the repayment may be made either in one lump sum or in instalments.

(ii) After the principal amount of the loan is fully repaid, the account holder shall pay interest thereon in not more than two monthly instalments at the rate of one per cent per annum of the principal for the period commencing from the first day of the month following the month in which the loan is drawn up to the last day of the month in which the last instalment of the loan is repaid:

Provided that where the loan is not repaid, or is repaid only in part, within a period of thirty-six months, interest on the amount of loan outstanding shall be charged at six per cent per annum instead of at one per cent. per annum with effect from the first day of the month following the month in which the loan was obtained, to the last day of the month in which the loan is finally repaid.

(iii) The interest on the amount of loan outstanding and any portion of interest payable, but not paid, on any loan, the principal amount of which has already been repaid within the period of thirty-six months, may, on becoming due, be debited to the holder’s account.

(iv) The interest recoverable shall accrue to the Central Government.

(v) The interest on outstanding loans which are not paid before the expiry of thirty-six months or paid partly shall be debited to the holder’s account at the end of each year.

(vi) In case of death of the account holder, the nominee or legal heir shall be liable to pay interest on the loan availed by the account holder but not repaid before his/her death. Such amount of due interest shall be adjusted at the time of final closure of the account.

Withdrawal from account

(i) A subscriber can make one withdrawal during a financial year by submitting application for withdrawal form along with passbook. The first withdrawal can be made at any time after the expiry of 5 years from the end of the year in which the initial subscription was made. The amount of withdrawal will be limited to 50% of the balance at the credit at the end of the 4th year immediately preceding the year in which the amount is withdrawn or at the end of the preceding year, whichever is lower. For example, if the account is opened in 2010- 11 and the first withdrawal is made during 2016-17, the amount of withdrawal will be limited to 50% balance as on 31.3.2013 or 31.3.2016 whichever is lower. Only one withdrawal can be made in one financial year. The amount of withdrawal is not repayable.

Provided that the amount of loan outstanding, if any, along with interest shall be paid by the account holder before availing the facility of withdrawal.:

(ii) In case of an account opened on behalf of a minor, or a person of unsound mind, the guardian may apply for the withdrawal for the benefit of the minor or a person of unsound mind by submitting the following certificate on the loan/withdrawal form (SB-7C) to the accounts office, namely: