Kisan Vikas Patra (KVP) which was discontinued in Dec 2011 has been again reintroduced. This instrument was earlier discontinued due to fears of Money Laundering as it was a Bearer Instrument and both the amount invested and the amount received on maturity could be received in cash. However, discontinuation of Kisan Vikas Patra (KVP) was hurting the savings mobilization of small investors and therefore these have been re-introduced from 2014 with certain modifications like:-
- Maturity Proceeds won’t be paid in Cash but would be transferred to the Post Office Savings Account.
- No KYC Norms would be applicable at the time of purchase of KVP.
- TDS @ 10% would also be deducted on the Interest earned on KVP.
- Reduction of the Maturity Period from 8 years & 7 months to 8 years & 4 Months. This reduction in the time period has led to increase in Interest Rate on KVP from 8.4% to 8.7%.
- KVP would initially be issued through Post Offices only but would later also be available in specified branches of nationalized banks.
Wednesday, December 10, 2014
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