One of the most popular small saving instruments in India – the Kisan Vikas Patra (KVP) was re-launched by the Union Govt. on 18 November 2014. It was discontinued from November 2011 following the recommendations of the Shyamala Gopinath Committee.
Following are the important facts associated with newly launched Kisan Vikas Patra
– Initially KVP will be available from the post offices but will soon be made available through designated branches of nationalised banks
– It will be available to the investors in the denominations of Rs. 1000, Rs. 5,000, Rs. 10,000 and Rs. 50,000, with no upper ceiling on investment
– The investment made in KVP will double in 100 months (i.e., it will have a maturity period of 8 year 4 months)
– There will be no requirement of Permanent Account Number (PAN) for making investment in KVP
– KVP will be a bearer instrument just like currency and will be easy to encash
– KVP certificates can be issued in single or joint names and can be transferred from one person to any other person / persons, multiple times.
– The facility of transfer from one post office to another anywhere in India and of nomination will be available for KVP
– KVP certificate can also be pledged as security to avail loans from the banks and in other case where security is required to be deposited
– Lock-in period for KVP will be 2 ½ years
– An investor can encash his/her KVP certificates after the lock-in period of 2 ½ years and thereafter in any block of six months on pre-determined maturity value.
Why the Union Govt. has re-launched the KVP?
The Union Govt. has re-launched the Kisan Vikas Patra primarily in a bid to encourage the habit of small savings among citizens. The scheme is expected to give a big boost to small savings sector and the proceeds collected on its behalf will be available with the Government for a fairly long period to be utilized in financing developmental plans of the Centre and State Governments. The scheme will also safeguard small investors from fraudulent schemes.
When the Kisan Vikas Patra was initially launched?
The KVP was initially launched on 1 April 1988. The maturity period of the scheme then was just 5 ½ years and the money invested doubled on maturity.
Why the KVP closed in 2011?
KVP scheme was discontinued from November 2011 on the recommendations of the Shyamala Gopinath Committee. The Shyamala Gopinath Committee, in its report submitted on 7 June 2011, had recommended that the KVP be discontinued as it was “prone to misuse, being a bearer-line instrument”. It said the KVP was more popular than the National Savings Certificate (NSC) because of the ease of transfer and liquidity.
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