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Union Government relaunched Kisan Vikas Patra scheme to encourage small savings

Nov 18, 2014 13:07 IST

The Union Government on 18 November 2014 relaunched Kisan Vikas Patra scheme (KVP) in New Delhi to encourage the habit of small savings among the citizens.

The scheme will soon be made available through designated branches of nationalized banks across the country.


Highlights of the Kisan Vikas Patra scheme (KVP)
•    The scheme will provide facility of unlimited investment by way of purchase of certificate from post office in various denominations.
•    The KVP will be available to the investors in the denomination of 1000, 5000, 10000 and 50000 rupees with no upper ceiling on investment.
•    The certificates can also be issued in single or joint names and can be transferred from one person to any other person. The investment made in the certificate will double in 100 months.
•    The facility of transfer from one post office to another anywhere in India and of nomination will also be available under the scheme.
•    Kisan Vikas Patra scheme has unique liquidity feature, where an investor can encash his certificates after the lock-in period of 2 years and 6 months and thereafter in any block of six months on pre-determined maturity value.
•    With a maturity period of 8 years 4 months, the collections under the scheme will be available with the Union Government for a fairly long period to be utilized in financing developmental plans of the Centre and State Governments.

Background
Kisan Vikas Patra (KVP), a certificate savings scheme was launched by the Union Government on 1 April 1988. The scheme provided facility of unlimited investment by way of purchase of certificates from post offices in various denominations.

The maturity period of the scheme when launched was 5 years and six months and the money invested doubled on maturity. Gross collections under the scheme in the year 2010-11 were 21631.16 crore rupees which was 9 percent of the total gross collections during the year.

In the year of its closure, the scheme secured gross collections of 7575.95 crores rupees (April 2011 to November 2011).

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