Rule 17 - Power to relax - Kisan Vikas Patra Rules, 1988

Power to relax 17. Where the Central Government is satisfied that the operation of any of the provisions of these rules causes undue hardship to the holder or holders of a certificate, it may, by order, for reasons to be recorded in writing, relax the requirements of that provision in a manner not inconsistent with the provisions of the Act. Lowering of interest rates of saving schemes applicable only on fresh deposits The Government today clarified that the changes in interest rates announced on certain small saving schemes with effect from 1st of January this year are applicable only to fresh deposits. Reacting to reports which appeared in a section of the press, the Finance Ministry said, the interest rates of Monthly Income Account, Kisan Vikas Patras, Indira Vikas Patras, Post Office Time Deposits, Post Office Recurring Deposits and National Sav ings Certificate VIII Issue on earlier deposits would continue to be the same which were effective at the time of deposit. Similar ly, for three year deposit schemes for retired Government/PSU employees the earlier rate of interest will continue to apply till the full term of three years on earlier deposits. The inter est rate on the balances of Post Office Savings Account will, however, be 4.5% with effect from January 1, 1999. The Government's decision to reduce interest rates followed acceptance of one of the recommendations of a committee which went into the various para-meters of the collections under the small saving schemes, disbursement of loans to State Governments and cost of small saving schemes. The Committee of Experts, set up at a conference of the Finance Ministers from ten States in November 1997, which discussed issues relating to small savings submitted its report on 7th September, 1998, to the Finance Minister. The Government has in principle agreed with the thrust of most of the recommendations. One of the recommendations of the Committee to benchmark the rates of interest to the rates of similar instruments in banks/financial institutions has been accepted. Consistent with the lower interest rates in public sector banks on savings accounts on term as well as recurring deposits, the rates of interest on similar instruments have been reduced. PIB Press Release, dated 20-1-1999.