Ahead of the beginning of the new financial year in April, the Finance Ministry spread cheer among fixed income investors by raising interest rates for small savings schemes and fixed deposits. At the same time the deadline for linking PAN card with Aadhar was extended by three months, while new rules came into effect.
Among these, PAN and Aadhar have been made mandatory documents for those investing in public provident fund, National Saving Scheme, Senior Citizen Saving Scheme and Sukanya saving scheme.
What's the new mandate?
As Aadhar has become compulsory for these schemes for those who don't have it an enrollment slip or number can be submitted.
But such applicants must submit an Aadhar card within six months of opening their account, or else it will be frozen.
The PAN Card or Form 60 must also be provided within two months and banks, as well as post offices, may ask for other documents.
What will this change?
The idea behind these new rules is to increase transparency and to prevent scams via small savings schemes.
Investors are also protected by creating a watertight mechanism for identity verification via PAN and Aadhar details.
Depite its use as a mandatory ID being challenged, Aadhar is increasingly being adopted for verification.
At the same time, Aadhar is not mandatory for opening bank accounts, although it is the preferred document for KYC.
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