Saturday, December 13, 2014

Shyamala Gopinath Committee for KVP

The Shyamala Gopinath Comrnittee constituted on Small Savings Schemes has submitted its report to the Government. Major recommendations of the committee were:- (i) to reduce/abolish agent`s commission except Manila Pradhan Kshetriya Bachat Yojana (MPKBY) agents to restrict management cost (ii) secondary market yields on Central Government Securities of comparable maturities should be the benchmarks for the interest on various small savings instruments and should be reset every 1st April (iii) Committee recommended to reduce minimum share for States from 80% to 50% against net collection and recommended that amount received on redemption of Central/State Governments securities should be reinvested between Centre and States in the ratio of 50:50. 

After detailed deliberation and in light of views received from State Governments, various Departments of Central Government and Agent`s Association, most of the recommendations of the Committee are being implemented. 

In view of developments observed by the Committee in 2011 on AML/CFT front the KVP was recommended to be discontinued by the Committee. KVP has been re-notified by the Government on 23-9-2014. Under the re-notified KVP the investor has to undergo the Know Your Customer (KYC) modalities at Post Office or Bank. 

This was stated by Shri Jayant Sinha, Minister of State in Ministry of Finance in written reply to a question in the Lok Sabha today (12/12/2014). 


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