November 18, 2014 1:24:56 am
Providing a fresh investment option for small investors, finance minister Arun Jaitley is set to re-launch the Kisan Vikas Patra (KVP) on Tuesday.
A hugely popular small saving product of the 1980s and 1990s , the KVP has been re-tailored and will be denomination of Rs 1000, 5000, 10,000 and 50,000 and promises to double the investment in 100 months. There will be no upper limit on investments in KVPs that can issued in single or joint names and can be transferred from one person to others multiple times.
The KVP will have a maturity period of eight year and four months but also offers a flexible liquidity system under which investors can encash their certificates after the lock-in period of two years and six months or any time after that in any block of six months on pre-determined maturity value.
While initially KVPs will be sold only through post offices, it will later be available at designated branches of nationalised banks. They can also be transferred from one post office to another and can be pledged as a security against loans.
“Reintroduction of KVP is a welcome step not only in the direction of providing safe and secure investment avenues to the small investors but will also help in augmenting the savings rate in the country,” said a finance ministry statement.
Jaitley had announced plans for re-launching a revamped KVP in the Budget to “encourage people, who may have banked or unbanked savings” to invest in formal saving products.
The KVP was originally launched from April 1, 1988 and over the years accounted for nearly 9 per cent to 29 per cent of the total collections received under all national savings schemes in the country.
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