The Great Leap Forward: A Public Sector Banker's View on India's New Banking Epoch (2022-2025)

 As a banker in a Public Sector Bank (PSB), I’ve witnessed an unparalleled transformation in the Indian banking landscape over the last three years (2022–2025). This period hasn't just been about incremental change; it has marked a true structural overhaul—a "Great Leap Forward"—driven by digital public infrastructure (DPI), robust regulatory reforms, and a fundamental cleanup of our balance sheets. For PSBs, this journey has been one of resurgence, moving from an era of stressed assets to one of sustained profitability and high-velocity credit growth.

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The Digital Revolution: DPI as the Backbone of Finance

The most palpable change for a frontline banker is the complete shift in how transactions and customer interactions are managed, largely thanks to India's DPI.

Unified Payments Interface (UPI) and Beyond

UPI remains the undisputed champion, with transaction volumes soaring to unprecedented levels (crossing 20 billion monthly transactions by August 2025). What’s new, however, is the depth of its integration. UPI is no longer just for person-to-person payments; it is evolving to facilitate:

• Offline and Feature Phone Payments: Enhancing financial inclusion for users in Tier-II, III, and rural areas who may not have constant internet access or smartphones.

• e-RUPI and CBDC Pilot: The Reserve Bank of India’s (RBI) push for a Central Bank Digital Currency (CBDC) has seen pilot programs, positioning us at the forefront of digital currency experimentation globally.

Open Networks: Account Aggregator and ONDC

The emergence of two new open frameworks is fundamentally changing how credit is assessed and commerce is conducted:

1. Account Aggregator (AA) Framework: This has been a game-changer for credit delivery. As a Financial Information User (FIU), our PSB can now, with the customer’s explicit, revocable consent, pull authenticated financial data (bank statements, tax returns, insurance details) from Financial Information Providers (FIPs). This transition from a document-driven process to a consent-based, data-driven one has significantly reduced the friction and turnaround time for retail and MSME loan underwriting, ensuring better risk assessment and a superior customer experience.

2. Open Network for Digital Commerce (ONDC): While primarily a commerce initiative, ONDC's impact on banking is profound. By standardizing catalogue, inventory, and order management, it creates an ecosystem where small businesses can be easily discovered. For us, the banker, this opens the door to embedded finance—providing credit, insurance, and working capital solutions directly at the point of commerce on the network, thereby expanding our lending reach to verified, digitally active MSMEs.

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A Clean and Stronger Balance Sheet

The operational and financial resurgence of PSBs is largely attributable to the relentless focus on asset quality and governance.

NPA Cleanup and Credit Growth

The results are staggering: the Gross Non-Performing Asset (GNPA) ratio for PSBs has shown a dramatic reduction, falling from 9.11% in March 2021 to a provisional 2.58% by March 2025. This is a direct outcome of the twin-engines of reform:

• Insolvency and Bankruptcy Code (IBC): Continued effectiveness of the IBC has instilled robust credit discipline.

• The ‘Bad Bank’ (NARCL-IDRCL): The operationalisation of the National Asset Reconstruction Company Limited (NARCL) and the India Debt Resolution Company Ltd. (IDRCL) is a critical development. By the end of 2024, NARCL had managed over ₹1 lakh crore of identified legacy bad loans. This dedicated structure allows PSBs to de-clog their balance sheets of large, complex stressed assets (₹500 crore and above), freeing up significant management bandwidth to focus on core lending activities and business growth.

This cleanup has restored market confidence, leading to robust credit growth, especially in the retail and MSME segments.

Governance and Regulatory Modernisation

The government and RBI have actively worked to modernise the legal framework, notably with the Banking Laws (Amendment) Act, 2025. Key provisions, effective from August 1, 2025, aim to:

• Improve Audit Quality: Allowing PSBs to offer higher remuneration to statutory auditors, which is vital for attracting top-tier talent and enhancing the independence and quality of bank audits.

• Enhanced Compliance: Aligning PSBs with the Companies Act for transferring unclaimed funds to the Investor Education and Protection Fund (IEPF), streamlining our reporting and investor protection standards.

• EASE Reforms: Continued implementation of the Enhanced Access and Service Excellence (EASE) reforms has professionalised governance, promoted data-driven lending, and fostered a performance-oriented culture within PSBs.

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Future-Ready Banking: ESG and Sustainable Finance

A crucial, forward-looking development is the institutionalisation of environmental, social, and governance (ESG) considerations and the strong push for Green Finance.

In line with India’s ambitious climate targets, including the 2070 net-zero goal, PSBs are actively integrating ESG into their credit assessment and operational strategy. We are now seeing:

• Green Lending: A significant increase in financing renewable energy projects, energy-efficient infrastructure, and electric vehicle adoption.

• Green Bonds: Several PSBs have successfully issued Green Bonds, mobilising capital specifically for sustainable projects, positioning Indian banking as a key global player in climate finance.

• Internal Sustainability: Banks are adopting green banking practices themselves, such as reducing our carbon footprint through paperless transactions and investing in energy-efficient branch infrastructure.

This shift ensures that our lending portfolio not only generates healthy returns but also contributes positively to the nation’s sustainable development goals.

In conclusion, the last three years have redefined the role of a PSB in the Indian economy. We have successfully leveraged the national DPI to drive unprecedented financial inclusion and efficiency, cleaned up our legacy issues through dedicated institutions like NARCL, and adopted a modern, compliant, and forward-looking governance structure. The PSB sector today is healthier, more agile, and poised to be the primary growth engine for the next phase of India’s economic journey. The focus remains on leveraging technology to enhance last-mile delivery and ensuring that responsible credit and robust risk management remain the cornerstones of this new, vibrant banking epoch.

Top Banking News Headlines of 22nd October 2025

 Bank Holidays for Diwali Week: Banks in several states across India are closed today, October 22, for festivals like Bali Pratipada, Vikram Samvant New Year Day, and Govardhan Pooja/Balipadyami. States observing the closure include Gujarat, Maharashtra, Karnataka, Uttarakhand, Sikkim, Rajasthan, and Uttar Pradesh. Digital services like mobile banking, UPI, and ATMs remain operatio

Credit Demand Revival Expected: Large private sector banks in India are seeing "green shoots" and anticipate a revival in credit demand in the second half of FY26, attributing this to supportive fiscal and monetary measures.

RBL Bank and Emirates NBD Deal: The recent news of Emirates NBD's potential large stake acquisition in RBL Bank (reported as high as 60% for a $3 billion investment) continues to be a major talking point, with RBL Bank reportedly eyeing a move into wealth management and aiming for a "large lender" status. The RBI's final approval remains key, as its guidelines typically cap a single foreign institutional shareholding at 15%.

PNB Estimates Impact of New RBI Credit Rules: Punjab National Bank (PNB) is one of the first major public-sector banks to quantify the potential financial hit from the Reserve Bank of India's proposed Expected Credit Loss (ECL) framework. PNB expects an estimated ₹9,000 crore impact by 2031, which it believes it can absorb through internal accruals.

Net Interest Margins (NIMs) on the Mend: Following Q2 earnings announcements, reports suggest that the Net Interest Margins (a key profitability measure) for many Indian banks are improving or "bottoming out," with both private and public sector lenders like Indian Overseas Bank, DCB Bank, and Federal Bank reporting sequential improvements.

What is Commercial Paper

Commercial papers (CPs) are short-term, unsecured debt instruments issued by corporations, financial institutions, and other entities to raise funds for their short-term operational needs, like inventory purchases, payroll, or short-term liabilities. Typically, they are issued at a discount and redeemed at face value upon maturity, which usually ranges from a few days to up to 270 days.

Key features of commercial papers:

1. **Unsecured**: They are not backed by any collateral, so only financially sound and creditworthy companies can issue them.

2. **Short-Term**: The maturity period is short, typically between 1 and 270 days.

3. **Issued at a Discount**: CPs are usually sold at a discount to their face value, and investors receive the full face value at maturity.

4. **High Denominations**: CPs are typically issued in large denominations, making them a popular investment for institutional investors rather than individuals.

5. **Liquidity**: Because of their short-term nature and high-quality issuers, they are considered a liquid asset.

Commercial papers are an important tool for companies to meet their working capital needs without going through more expensive and time-consuming long-term borrowing methods like bank loans or bonds.

What is Letter of Credit (LC) ? Types of LC

Letters of credit (LC) are financial instruments used in international trade to ensure that payment will be made as per the agreed terms between the buyer and the seller. Various types of letters of credit are used, each serving different needs and purposes. Here's a detailed look at the most common types:

### 1. **Revocable Letter of Credit**

   - **Definition**: A revocable LC can be altered or canceled by the issuing bank at any time without prior notice to the beneficiary (seller).

   - **Details**: This type of LC offers little protection to the seller because the buyer or issuing bank can change terms or withdraw the LC without consent. It’s rarely used in practice due to its inherent risk.

### 2. **Irrevocable Letter of Credit**

   - **Definition**: An irrevocable LC cannot be changed or canceled without the consent of all parties involved: the issuing bank, the beneficiary, and the applicant (buyer).

   - **Details**: This type provides a strong guarantee to the seller that payment will be made as long as all terms and conditions are met. It is commonly used in international trade.

### 3. **Confirmed Letter of Credit**

   - **Definition**: In addition to the issuing bank, another bank (often in the seller’s country) guarantees the payment.

   - **Details**: This type adds a second layer of security for the beneficiary, especially in cases where the issuing bank is in a country with political or economic instability. It is often used when the beneficiary has doubts about the issuing bank's credibility.

### 4. **Unconfirmed Letter of Credit**

   - **Definition**: This LC is guaranteed only by the issuing bank, without any additional confirmation from another bank.

   - **Details**: The beneficiary relies solely on the issuing bank’s creditworthiness. It is less secure compared to a confirmed LC.

### 5. **Standby Letter of Credit (SBLC)**

   - **Definition**: A standby LC acts as a safety net, ensuring payment only if the buyer fails to fulfill the contract terms.

   - **Details**: Often used as a guarantee rather than a primary payment mechanism. The beneficiary can claim payment under the SBLC only if the primary contract is breached.

### 6. **Transferable Letter of Credit**

   - **Definition**: A transferable LC allows the original beneficiary to transfer part or all of the credit to another party, usually the supplier.

   - **Details**: Commonly used in transactions involving middlemen, where the beneficiary may need to pay their own suppliers without using their own funds.

### 7. **Back-to-Back Letter of Credit**

   - **Definition**: Involves two separate LCs used together, where the beneficiary of one LC uses it as collateral to secure a second LC.

   - **Details**: Often used in complex trading arrangements involving intermediaries who do not have sufficient funds or credit to finance the deal themselves.

### 8. **Red Clause Letter of Credit**

   - **Definition**: This LC allows the beneficiary to receive an advance payment before shipping goods.

   - **Details**: The clause is written in red ink, hence the name. It provides the beneficiary with working capital, and the advance is later deducted from the total payment.

### 9. **Green Clause Letter of Credit**

   - **Definition**: An extension of the red clause LC, providing the beneficiary with advance payment not only for pre-shipment but also for storage and insurance costs.

   - **Details**: Offers even more flexibility and financial assistance compared to the red clause LC.

### 10. **Revolving Letter of Credit**

   - **Definition**: This LC automatically renews itself after each cycle or use until the total amount is exhausted.

   - **Details**: Suitable for ongoing, repetitive transactions between the same buyer and seller, such as monthly shipments.

### 11. **Sight Letter of Credit**

   - **Definition**: Payment is made immediately upon presentation and verification of the required documents.

   - **Details**: The seller receives payment as soon as the issuing bank examines and approves the documents.

### 12. **Usance (Deferred Payment) Letter of Credit**

   - **Definition**: Payment is made at a specified future date after the presentation of documents.

   - **Details**: This LC allows the buyer a grace period before payment is due, providing short-term credit.

### 13. **Negotiation Letter of Credit**

   - **Definition**: Allows the beneficiary to receive payment by presenting the documents to any bank, not just the issuing bank.

   - **Details**: Encourages multiple banks to negotiate the LC, often leading to quicker payments.

Each type of LC serves specific purposes, balancing the needs of the buyer and seller while managing risks in international trade.

Public Provident Fund

 

Public Provident Fund

 

 Public Provident Fund is a scheme of Central Govt. framed under the Public Provident Fund Act, 1968. The scheme came into force w.e.f. 01.07.1968. This is a government backed, long term small savings scheme. The account under this scheme can be opened in selected branches of banks and post offices.

Eligibility:  A Resident Indian individual on his behalf or on behalf of a Minor or a person of unsound mind of whom he is a guardian is eligible to open a PPF account.  The account on behalf of a minor can be opened either by the father or mother of the minor only and not by both.  In case of death of both father & mother, grand parents can open the account as guardian of the grandchild.  Only one PPF account can be opened by the individual, except an account that is opened on behalf of a minor or person of unsound mind.  Opening of PPF account by NRI (Non-Resident Indian), HUF (Hindu Undivided Family), Person of Association (POA), Trust or in Joint Name is not permitted. Also, Joint account shall not be opened under this scheme. Documents required to open a PPF account:  PPF Account opening form  In case of existing accounts, Aadhaar number is to be obtained (If Aadhaar number is not available, proof of enrolment is to be obtained)  Nomination Form  Passport size Photograph  Copy of Pan Card / Form 60-61  ID Proof and Residence proof as per Bank’s KYC norms.

Monetary Limit:  The minimum deposit is Rs. 500 and maximum limit is Rs.1, 50,000/- can be invested in a financial year under this scheme.  The combined deposit amount in the PPF account of an individual and in the account operated by this individual on behalf of a Minor together cannot exceed Rs.1,50,000.  If the subscription is done through Cheque / DD, the date of realization will be the date of deposit.

Duration:  The term of the account is 15 financial years, excluding the financial year in which the account was opened.  In case of death of the account holder, their nominee/legal heirs can close the account before maturity.

 Extension of Account: After maturity of the account, the account holder has three options: ✓ First, the account can be closed immediately ✓ Second, the account can be continued without deposits for any period ✓ A customer can extend the tenure of the PPF investment for a block period of 5 years at a time beyond the maturity period by submitting account extension form within one year from the date of maturity.

Rate of Interest:  Rate of interest payable on the investment is as declared by the Central Govt. from time to time. Interest is calculated on the lowest balance between the close of the fifth day and last day of every month. Interest shall be credited in account at the end of year irrespective of change of account office due to transfer of account during the year.

Withdrawals:  Any time after the expiry of five years from the end of the year in which the account was opened, the account holder may, avail withdrawal by applying in Form-2, from the balance to his credit, an amount not exceeding fifty per cent. of the amount that stood to his credit at the end of the fourth year immediately preceding the year of withdrawal or at the end of the preceding year, whichever is lower: ✓ 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 under this paragraph: ✓ Provided further that the facility of withdrawal may be availed only once in a year only from the accounts which have not become discontinued.  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 certificate to the account’s office.

Premature closure of account:  Premature closure is allowed after the completion of 5 financial year from the account opening date under following cases: ✓ That the amount is required for the treatment of serious ailments or life threatening diseases of the account holder, spouse or dependents on production of supporting documents from Competent Medical Authority. ✓ That the amount is required for higher education of account holder or the minor account holder on production of documents and fee bills in confirmation of the admission from recognized institute. ✓ On change in residency status of the account holder on production of copy of Passport and visa or Income tax return.

Note: Provided further that on such premature closure, interest in the account shall be allowed at a rate which shall be lower by one per cent than the rate at which interest has been credited in the account from time to time since the date of opening of the account, or the date of extension of the account, as the case may be. a) In case of extended accounts for blocks of 5 years, partial withdrawal is allowed up to 60% of the balance at the beginning of the extension period. b) A resident who opened an account under PPF Scheme, subsequently becomes a Non-Resident during the currency of the maturity period, the account shall be deemed to be closed with effect from the day he / she becomes a non-resident. Interest in account shall be allowed at rate lower by one percent than the rate at which interest has been credited in account from time to time since date of opening of account or date of extension.

Loans & repayment:  At any time after the expiry of one year from the end of the year in which the initial subscription was made but before expiry of five years from the end of the year in which the initial subscription was made.  The customer must apply in Loan application form, amount cannot exceed 25% of the balance at the credit at the end of 2nd preceding year.  No loan is permitted if an earlier loan is outstanding or the customer is eligible for withdrawals. Subsequent loan cannot be taken in same financial year even if the 1st loan is fully repaid.

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

Nomination:  Nomination facility is available in the name of one or more persons.  The shares of the nominees can also be defined by the customer.  If the minor is a nominee, then the customer should also appoint somebody to receive and hold the PPF funds until the nominee attains the maturity.  No nomination is permitted in case of minor’s account. Nominee cannot continue the account after the death of the customer.  Nominee can apply to close the account and receive the fund after the death of the customer in premature closure form.

Transfer of Account:  The account can be transferred to/from other branches/banks/post offices. The transferee bank branch must be a designated branch for opening PPF Account. No charges for transferring the account.

Tax benefits:  Subscriptions during the financial year up to Rs.150000 only qualify for rebate under sec 80 C of Income Tax Act.  Interest accrued in PPF account and withdrawals thereof are fully exempt under sec. 10(11) of Income Tax Act.  The investment under the scheme is fully exempt from wealth tax.

Discontinued Accounts:  Accounts in which the minimum subscription of Rs. 500/- is not made during a financial year, is called a default in the subscription.  It can be condoned by depositing Rs.500 (subscription amount) and Rs.50 (default fee) for each financial year of default.  The account holder of discontinued account shall not be eligible to open new account before closure of such discontinued account after maturity.  Facility of loan and partial withdrawals shall not be allowed in such accounts, and to be allowed only for regular accounts only.

Passbook:  Passbook will be issued to every subscriber. In the event of loss of passbook, a duplicate passbook can be issued on payment of a fee.

SUKANYA SAMRIDDHI ACCOUNT (SSA)

 

SUKANYA SAMRIDDHI ACCOUNT (SSA)

This is one of the flagship savings schemes launched by Government of India and adequate publicity has been accorded by different agencies to this scheme, it has generated much interest in General public. Since Sukanya Samriddhi scheme offers a host of benefits to its account holders as far as tax benefit, rate of interest etc. are concerned.

Sukanya Samriddhi Account Yojana offers a small deposit investment for the girl children as an initiative under ‘Beti Bachao Beti Padhao’ campaign. One of the key benefits of the scheme is that it is quite affordable and offers one of the highest rates of interest and interest benefits as well.

Account opening:

A natural/legal guardian on behalf of a Girl Child up to the age of 10 years.

Maximum number of accounts: Up to two girl children or three in case of twin girls as second birth or the first birth itself results in three Girl Children.

Monetary Limit: Account can be opened with Min. Rs.250 as initial deposit. A minimum of Rs. 250 is to be deposited in the financial year and thereafter in multiple of fifty rupees with annual ceiling of Rs.150000 in a FY.

Documents Required: Birth Certificate of Girl child; Address proof of parents/guardians; Identity Proof of the parents/guardian.

Tenure of the Deposit: Maximum period of the deposit is 15 years from the date of opening of the account & the tenure of the deposit is 21 years from the date of opening of the account.

Transfer of Account: Permissible from one post office to another, from bank to post office or from one bank to another bank.

Interest on Deposit: As notified by the GOI, compounded annually.

Tax Rebate: As applicable under section 80C of the IT Act, 1961 up to Rs.1.5 lakh p.a. Interest accrued in the account and withdrawals thereof are fully exempt under sec. 10(11) of Income Tax Act.

Premature Closure:  After 5 yr. in cases of extreme compassionate grounds such as medical support in life threatening diseases or death of the guardian that the operation or continuation of the account is causing undue hardship to the account holder, to be authorized by an order by the Central Government supported by complete document.  In the event of change of status of account holder i.e. citizenship or residential status.  Premature closure is also permitted in the event of marriage of the account holder if she has attained the age of 18 years.  The account can be prematurely closed in the event of death of the account holder at any point of time after opening subject to payment of interest at Post Office Savings Bank rate for the balance held in the account.

Irregular Payment/ Revival of account: If there is no deposit in a financial year, is called a default in the subscription. It can be condoned by depositing Rs.250 (subscription amount) and Rs.50 (default fee) for each financial year of default.

Mode of Deposit: Deposit can be made through Cash/Cheque/ Demand Draft/Online.

 

 

Withdrawal:  Withdrawal is permissible only when the girl has attained the age of 18 years or has passed 10th standard whichever is earlier. To meet the financial requirements at the time of higher education. 50% of the previous financial year’s balance can be withdrawn in lump sum or in five yearly installments. The application for withdrawal shall be accompanied by documentary proof in the form of a confirmed offer of admission of the account holder in an educational institution or a fee-slip from such institution indicating such financial requirement. Closure on Maturity: Completion of 21 years from the date of opening of the account & where the marriage of the account holder takes place before completion of such period of 21 years. (Affidavit verifying Account Holder’s 18 years of age as on date of closing of account provided that no such closure shall be allowed before one month from the date of intended marriage or after three months from the date of marriage). No interest is payable after completion of 21 years from the date of opening.

Know all about Senior Citizen’s Deposit Scheme: An healthy way to invest you life earning for secure return

 

Know all about Senior Citizen's Deposit Scheme 

As per Government of India notification dated 12.12.2019, this scheme is called as Senior Citizens’ Saving Scheme, 2019. Senior Citizen’s Deposit Scheme, 2019 is a Central Government Scheme for Senior Citizens for better returns.

All the nationalized banks, private Banks (Only HDFC, ICICI and Axis) and Post Offices are authorized to open account under this Scheme.

 

Eligibility:

1. An Individual who has attained the age of 60 years and above on the date of opening of the account. (Except NRIs and HUFs).

2. An Individual who has attained the age of 55 years or more but less than sixty years, and who has retired on superannuation or otherwise on the date of opening of an account under this Scheme, subject to the condition that the account is opened by such individual within one month of the date of the receipt of retirement benefits and proof of date of disbursal of such retirement benefit(s) along with a certificate from the employer indicating details of retirement on superannuation or otherwise, retirement benefits, (“Retirement benefits”: means any payment due to the depositor on account of retirement gratuity, commutation, leave encashment, group linked insurance, Ex-gratia payment and provident fund)employment held and period of such employment with the employer, is attached with the application form.

3. The age limit for Retired Defence Personnel (Excluding civil defence) retired on superannuation, are eligible at the age of 50yrs. (as per GSR 1235 (E) Dt. 3 Oct 2017)

4.  The Account can be opened in individual capacity or a jointly with spouse of the senior citizen/ Retiree.

5. In case of Joint account, the age of the first account holder shall be considered to determine the eligibility to open the account and there shall be no age limit for the second applicant.

 

Monetary Limits:

The individual may open one or more accounts in multiples of Rs.1000/-. • Subject to a maximum of Rs.30 Lac including all the investments made by the customer in various accounts. There shall be only one deposit in the account.

 

      Both the spouse can open single account and joint account with each other with the maximum deposit of up to thirty lakhs rupee in each account provided both are individually eligible to open the account.

   The whole amount of deposit in the Joint account shall be attributable to first account holder only.

        Duration:

    The deposits are for a period of 5 years. The same can be extended once for a further period of 3 years by the depositor.

     Extension of an account shall be available only once. Rate of Interest: As declared by the Central Government from time to time and which is payable from the date of deposit to 31st march/30th June//30th September/31st December on first working day of April/July/October/January, as the case may be, in the first instance and thereafter interest shall be payable on first working day of April/July/October/January.

Loan Facility: Not available

 Nomination:

.       The depositor may nominate a person or more than one person at the time of opening the account or any time before the closure of the account.

    The nomination can be varied/cancelled by submitting fresh nomination form.

  In case of joint account, the nominee’s claim will arise only after the death of both the account holders.

 

Transfer of Account:

The account can be transferred to other branches/banks/post offices. The depositor must apply in the prescribed format FORM G.

 

Tax Benefits:

 Qualify for tax rebate under sec 80 C of Income Tax Act. Interest earned is fully taxable. TDS is applicable.

   Passbook:

 A passbook will be issued to every depositor.

 Closure of the Account:

 The account will be closed after five years unless extended by the depositor. FORM 3 is used for closure of the account. Premature closure of the account is permitted, the account holder may withdraw the deposit and close the account at any time on an application in Form-2 subject to following condition namely: - 1.  In case the account is closed before one year after the date of opening of account, interest paid on the deposit in the account shall be recovered from the deposit and the balance shall be paid to the account holder. 2.  In case the account is closed after the expiry of one year but before the expiry of two years from the date of its opening, an amount equal to one and a half percent of deposit shall be deducted and balance should be paid to account holder. 3. In case the account is closed after the expiry of two year from the date of its opening, an amount equal to one percent of deposit shall be deducted and balance should be paid to account holder. 4. If the depositor is availing the facility of extension of account, then he/she can close the account after one year from the date of extension without any deduction. 5. In case of death of the depositor before maturity the account will be closed, and deposit will be refunded to nominee/legal heir. 6.  In case of a joint account, or where the spouse is the sole nominee, the spouse may continue the account on the same terms and conditions as specified under this Scheme, if the spouse meets eligibility conditions under the Scheme on the date of death of the account holder.

           

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