The Government Savings Promotion Act, 1873
# THE GOVERNMENT SAVINGS PROMOTION ACT, 1873

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# ARRANGEMENT OF SECTIONS
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PREAMBLE

_Preliminary_

SECTIONS

1. Short title.

Local extent.

2. [Omitted.].

3. Definitions.

3A. Framing of Savings Schemes.

3B. Deposit by minor.

_Deposits Belonging to the Estates of Deceased_

4. Nomination by depositor.

4A. Payment on death of depositor.

5. Payment to be discharge.
Saving of right of executor.

Saving of right of creditor.

6. Security for due administration.
7. Power to administer oath.

Penalty for false statements.

7A. Power to call for information.

8. Deposit when excluded in computing court fees.

9. Act not to apply to deposits belonging to estates of European soldiers or deserters.

_Deposits belonging to minors_

10. Payment of deposits to minor or guardian.

11. Legalisation of like payments heretofore made.

_Deposits belonging to lunatics_

12. Payment of deposits belonging to lunatics.

12A. Operation of account by differently abled persons.

_Deposits made by married women_

13. [Omitted.]

_Miscellaneous_

14. Protection of action taken in good faith.

14A. Protection against attachment.

15. Power to make rules.

16. Repeal and savings.

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# THE GOVERNMENT SAVINGS PROMOTION ACT, 1873 
 ACT NO. 5 OF 1973[1]

[28th January, 1873.]

2[An Act to regulate and channelise the savings from general public into Government Savings

Schemes.]

**Preamble.—WHEREAS it is expedient to amend the law relating to the payment of deposits in**

Government Savings Banks; It is hereby enacted as follows:—

_Preliminary_

**1. Short title.—This Act may be called the Government Savings** [3][Promotion] Act, 1873.

**Local extent.—It extends to [4][the whole of India [5]***].**

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**2. [Act not to apply to deposits in Anchal Savings Bank.]Omitted by the Finance Act,** 2018 (13 _of_

2018), s. 117 (w.e.f. 1-4-2018).

**[7][3. Definitions.—In this Act, unless the context otherwise requires,—**

(a) “account” means an account opened under any of the Savings Schemes;

(b) “administrator” means an administrator as defined in clause (a) of section 2 of the Indian

Succession Act, 1925 (39 of 1925);

(c) “Authorised Officer” means—

(i) in the case of a Post Office Savings Bank, an officer authorised by the Director General

Posts; and

(ii) in the case of State Bank of India or a banking company or any other company or

institution, an officer so authorised by State Bank of India or that banking company or that other
company or that institution, as the case may be;

(d) “banking company” means a banking company as defined in clause (c) of section 5 of the

Banking Regulation Act, 1949 (10 of 1949);

(e) “depositor” means an individual by whom, or on whose behalf money has been deposited in a

Government Savings Bank and “deposit” means the money so deposited;


(f) “executor” means an executor as defined in clause (c) of section 2 of the Indian Succession

Act, 1925 (39 of 1925);

(g) “Government Savings Bank” means—

(i) a Post Office Savings Bank; or

1. The Act has been extended to the Union territory of Goa, Daman and Diu _vide Notification No. S.O. 2734 dated 1st September,_

1962, see Gazette of India, Extraordinary, Pt. II, Sec. 300, p. 1991, extended to and brought into force in Dadra and Nagar Haveli by
Reg. 6 of 1963, s. 2 and Sch. I (w.e.f. 1-7-1965) and to the whole of the Union territory of Lakshadweep by Reg. 8 of 1965, s. 3 and
Sch.. (w.e.f. 1-10-1967).

The Act came into force in Pondicherry on 1-10-1963 vide Reg. 7 of 1963, S. 3 and Sch. I.

2. Subs. by Act 13 of 2018, s.114, for long title (w.e.f. 1-4-2018).
3. Subs. by s. 115, ibid., for “Banks” (w.e.f. 1-4-2018).
4. Subs. by the A.O.1950, for “all the Provinces of India” which had been subs, by the A. O. 1948, for “the whole of British

India”.

5. The words “except the State of Jammu anti Kashmir” which were subs. by Act 3 of 1951, for “except Part B States” omitted

by Act 62 of 1956, s. 2 and Sch.

6. The commencement clause rep. by Act 16 of 1874, s. 1 and Sch., Pt. I.
7. Subs. by Act 13 of 2018, s. 118, for section 3 (w.e.f. 1-4-2018).

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(ii) State Bank of India or a banking company, or any other company or institution, as the

Central Government may, by notification in the Official Gazette, specify for the purposes of this
Act;

(h) “guardian”, in relation to a minor or a person of unsound mind means—

(i) either of the parents;

(ii) where neither parent is alive or where neither or the only living parent is incapable of

acting as such, a person entitled under the law for the time being in force to have the care of the
property of a minor or a person of unsound mind, as the case may be;

(iii) legal guardian appointed by a court;


(i) “minor” means a person who has not attained the age of majority under the Indian Majority

Act, 1875 (9 of 1875);

(j) “prescribed” means prescribed by rules made under this Act;

(k) “Savings Schemes” means the Government Savings Schemes, including Savings Certificates

and Public Provident Fund Scheme, listed in the Schedule;

(l) “Schedule” means the Schedule annexed to this Act.

**3A. Framing of Savings Schemes.—(1) The Central Government may, by notification in the Official**

Gazette, frame new Savings Schemes or amend or discontinue existing Savings Schemes to promote
household savings in the country.

(2) The Central Government may, by notification in the Official Gazette, include or omit or amend

Savings Schemes in the Schedule.

(3) The notification referred to in sub-section (1) may include any or all of the following provisions,

depending on the design of such Scheme, namely:—

(a) the persons who shall be eligible to make deposit in a Savings Scheme;

(b) the terms and conditions subject to which deposit may be made;

(c) the manner of calculation, frequency of payment and rate of interest payable on the deposit;

(d) the maximum and minimum limits of deposit;

(e) premature closure, withdrawal of deposit, grant of loans against deposit and transfer of

deposit;

(f) any other provision depending on the purpose and design of the Savings Scheme.

**3B. Deposit by minor.—(1) A minor who has attained the age of ten years may open and operate an**

account in the Government Savings Bank, if so permitted under a Savings Scheme.

(2) Subject to the provisions of sub-section (1), the guardian of a minor may open and operate an

account on behalf of the minor, till he becomes a major.]

_Deposits Belonging to the Estates of Deceased_

1[4. Nomination by depositor.—2[(1) The depositors shall designate one or more individuals, as

nominee or nominees, who shall be entitled, in the event of the death of the depositor of a single account,
or all the depositors of a joint account, as the case may be, to receive the sum due, as an owner or a
trustee, and to the extent, as may be specified by the depositor at the time of making nomination:

Provided that if the depositor is a minor or a person of unsound mind, the nominee shall be

designated by the guardian.]

1. Subs. by Act 45 of 1959, s. 3, for the former s. 4.
2. Subs. by Act 13 of 2018, s. 119, for sub-section (1) (w.e.f. 1-4-2018).

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(2) Any nomination referred to in sub-section (1) shall become void if the nominee predeceases, or

where there are two or more nominees, all the nominees predecease; the depositor.

(3) Where the nominee is a minor it shall be lawful for the depositor to appoint in the

prescribed manner any person to receive the deposit in the event of his death during the minority of
the nominee.

1[(4) The transfer of deposit, if permitted under a Savings Scheme, shall automatically cancel a

nomination previously made.]

**4A. Payment on death of depositor.—(1) If a depositor dies and there is in force at the**

time of the death of the depositor a nomination in favour of any person, the deposit shall be paid
to the nominee.

(2) Where the nominee is a minor, the deposit shall be paid—

(a) in any case where a person has been appointed to receive it under sub-section (3) of section 4,

to that person; and

(b) where there is no such person, to the guardian of the minor for the use of the minor.

(3) Where a deposit is payable to two or more nominees and either or any of them is dead, the deposit

shall be paid to the surviving nominee or nominees.

2[(3A) Where the deposit belongs to a minor or to a person of unsound mind who dies and there is no

nominee immediately before the date of commencement of Part I of Chapter VIII of the Finance Act,
2018, the deposit shall be paid to the guardian.]

(4) If a depositor dies and there is no nomination in force at the time of his death and probate

of his will or letters of administration of his estate or a succession certificate granted under the
Indian Succession Act, 1925 (39 of 1925), is not within three months of the death of the
depositor produced to the [3][Authorised Officer] of the Government Savings Bank in which the
deposit is, then—

(a) if the deposit does not exceed [4][such limit as may be prescribed] the [3][Authorised Officer]

may pay the same to any person appearing to him to be entitled to receive it or to administer the estate
of the [5][deceased in accordance with such procedure as may be prescribed.]

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**5. Payment to be a discharge.—** [8][Any payment made in accordance with the foregoing

provisions of this Act] shall be a full discharge from all further liability in respect of the money so
paid

**Saving of right of executor.—** **[9][Nothing] herein contained precludes any executor or**

administrator, or other representative of the deceased, from recovering from the person
receiving the same the amount remaining in his hands after deducting the amount of all debts
or other demands lawfully paid or discharged by him in due course of administration.

1. Ins. by Act 13 of 2018, s. 119 (w.e.f. 1-4-2018).
2. Ins. by s. 120, ibid. (w.e.f. 1-4-2018).
3. Subs. by s. 116, ibid., for “Secretary” (w.e.f. 1-4-2018).
4. Subs. by Act 56 of 1985, s. 2, for “five thousand rupees”.
5. Subs. by Act 13 of 2018, s. 120, for “deceased; and” (w.e.f. 1-4-2018).
6. Clause (b) omitted by s. 120, ibid. (w.e.f. 1-4-2018).
7. Sub-section (5) omitted by s. 120, ibid. (w.e.f. 1-4-2018).
8. Subs, by Act 45 of 1959, s. 4 for “Such payment”.
9. Subs. by Act 13 of 2018, s. 121, for “But nothing” (w.e.f. 1-4-2018).

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**Saving of right of creditor.—[1][Every creditor] or claimant against the estate of the deceased**

may recover his debt or claim out of the money paid under this Act, [2]*** to any person, and remaining
in his hands unadministered, in the same manner and to the same extent as [3][if that person had obtained]
letters of administration of the estate of the deceased.

**6. Security for due administration.—The [4][Authorised Officer] of [5][a Government Savings**

Bank] may take such security as he thinks necessary from any person [6][to whom he pays any
money under sub-section (4) of section 4A] for the due administration of the money so paid,

and he may assign the said security to any person interested in such administration.

**7. Power to administer oath.—For the purpose of ascertaining the right of the person**

claiming to be entitled as aforesaid, the [4][Authorised Officer] of [7][a Government Savings Bank]
may take evidence on oath or affirmation according to the law [8] for the time being relating to oaths
oaths and affirmations.

**Penalty for false statements.—Any person who, upon such oath or affirmation, makes any**

statement which is false, and which he either knows or believes to be false or does not believe to
be true, shall be deemed guilty of an offence under section 193 of the Indian Penal Code
(45 of 1860).

9[7A. Power to call for information.—The Central Government through any designated authority,

may call for such information, documents and evidence as it may deem necessary, in relation to any
account, for carrying out the purposes of this Act.]


**8. Deposit when excluded in computing court fees.—Where the amount of the deposit belonging to**

the estate of a deceased depositor does not exceed [10][the prescribed limit] such amount shall be excluded
in computing the fee chargeable, under the Court-fees Act, 1870 (7 of 1870), on the probate, or letters of
administration, or certificate (if any), granted in respect of his property[11]:

Provided that the person claiming such probate or letters or certificate shall exhibit to the Court

authorised to grant the same a certificate of the amount of the deposit in any Government Savings
Bank belonging to the estate of the deceased. Such certificate shall be signed by the [4][Authority
Officer] of such Bank, and the Court shall receive it as evidence of the said amount.

**9.** [Act not to apply to deposits belonging to estates of European soldiers or deserters.] Rep. by the

_Government Savings Banks (Amendment) Act, 1959 (45 of 1959), s. 7._

_Deposits belonging to minors_

**10. Payment of deposits to minor or guardian.—Any deposit made by,** [12][or on behalf of, a

minor], may be paid to him personally, if he made the deposit, or to his guardian [13][for the use of
such minor], if the deposit was made by any person other than the minor, together with the
interest accrued thereon.

The [14][receipt of the minor] or guardian, for money paid to him under this section, shall be a

sufficient discharge therefor.

1. Subs. by Act 13 of 2018, s. 121, for “And any creditor” (w.e.f. 1-4-2018).
2. Of the words “or the said Act No. 26 of 1855” the words “the said” were omitted by Act 12 of 1891, s. 2 and Sch. I, Pt. I, and

the remaining words by Act 45 of 1959, s. 4.

3. Subs. by Act 13 of 2018, s. 121, for “if the latter had obtained” (w.e.f. 1-4-2018).
4. Subs. by Act 13 of 2018, s. 116, for “Secretary” (w.e.f. 1-4-2018).
5. Subs. by s. 122, ibid., for certain words (w.e.f. 1-4-2018).
6. Subs. by Act 45 of 1959, s. 5, for “to whom he pays any money under section 4”.
7. Subs. by Act 13 of 2018, s. 123, for certain words (w.e.f. 1-4-2018).
8. See the Indian Oaths Act, 1873 (10 of 1873).
9. Ins. by Act 13 of 2018, s. 124 (w.e.f. 1-4-2018).
10. Subs. by s. 125, ibid., for “three thousand rupees[”] (w.e.f. 1-4-2018).
11.Cf. the Savings Bank Act, 1828 (9 Geo. 4, c. 92), s. 40, now rep. by the Savings Banks Act, 1863 (26 and

27 Viet., c. 87).

12. Subs. by Act 13 of 2018, s. 126, for “or on behalf of, any minor” (w.e.f. 1-4-2018).
13. Subs. by s. 126, ibid., for “for his use” (w.e.f. 1-4-2018).
14. Subs. by s. 126, ibid., for “receipt of any minor” (w.e.f. 1-4-2018).

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**11.** [Legalization of like payments heretofore made.] Rep. by the Government Savings Banks

_(Amendment) Act, 1959 (45 of 1959), s. 7._

_Deposits belonging to lunatics_

**12. Payment of deposits belonging to lunatics.—If any depositor becomes insane or otherwise**

incapable of managing his affairs,

and if such insanity or incapacity is proved to the satisfaction of the [1][Authorised Officer] of the

2[Government Savings Bank] in which his deposit may be,

such [1][Authorised Officer] may, from time to time, make payments out of the deposit to

3[guardian],

and the receipt of [4][such guardian], for money paid under this section, shall be a sufficient discharge

therefor,

Where a committee or manager of the depositor’s estate has been duly appointed, [5][payments shall be

be made to] such committee or manager.

6[12A. Operation of account by differently abled persons.—Any depositor who suffers from

physical infirmity, including blindness may operate and make a deposit through any literate individual
whom he authorises.]

_7***_

**13. [Payment of married women’s deposits.]** _Omitted by the Finance Act, 2018 (13 of 2018), s. 130_

(w.e.f. 1-4-2018).

8Miscellaneous

**14. Protection of action taken in good faith.—No suit or other legal proceeding shall lie against the**

1[Authorised Officer] or any other officer of the 9[Central Government] in respect of anything which is in
good faith done or intended to be done under this Act.

10[14A. Protection against attachment.—The amount standing to the credit of any depositor in the

Public Provident Fund Scheme shall not be liable to attachment under any decree or order of any court in
respect of any debt or liability incurred by the depositor.]

# 15. Power to make rules.—(1) The Central Government may, by notification in the Official
 Gazette, make rules for carrying out the purposes of this Act.

(2) In particular, and without prejudice to the generality of the foregoing power, such rules may

provide for all or any of the following matters, namely:—

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12[(b) the conditions as to interest or discount relating to deposits generally, or any class of

deposits in particular;]

(c) the non-accrual of interest on deposits when the maximum limits are exceeded and the

recovery of any interest paid in excess in the same manner as an arrear of land revenue or in any other
manner;

1. Subs. by Act 13 of 2018, s. 116, for “Secretary” (w.e.f. 1-4-2018).
2. Subs. by s. 127, ibid., for “Bank” (w.e.f. 1-4-2018).
3. Subs. by s. 127, ibid., for “any proper person” (w.e.f. 1-4-2018).
4. Subs. by s. 127, ibid., for “such person” (w.e.f. 1-4-2018).
5. Subs. by s. 127, ibid., for “nothing in this section authorises payments to any person other than” (w.e.f. 1-4-2018).
6. Ins. by s. 128, ibid. (w.e.f. 1-4-2018).
7. The heading “Deposits made by married women” omitted by s. 129, ibid. (w.e.f. 1-4-2018).
8. Subs. by s. 9, ibid., for the heading “Rules”, and s. 14.
9 .Subs. by Act 13 of 2018, s. 131, for “Government” (w.e.f. 1-4-2018).
10. Ins. by s. 132, ibid. (w.e.f. 1-4-2018).
11. Clause (a) omitted by s. 133, ibid. (w.e.f. 1-4-2018).
12. Subs. by s. 133, ibid., for clause (b) (w.e.f. 1-4-2018).

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(d) the persons to whom and the manner in which deposits may be paid;

(e) the form of nominations, the manner in which, the persons in whose favour and the

conditions and restrictions subject to which, nominations may be made and the registration of
nominations;

(f) the variation or cancellation of nominations;

1[(g) the fees that may be levied for discharge of any services under this Act;]

(h) the manner in which any person may be appointed for the purpose of subsection (3) of section

4;

2[(i) the limit and procedure under clause (a) of sub-section (4) of section 4A;

(j) the mode of making deposits, such as physical, electronic or through use of any other tools of

communication and information technology;

(k) benchmark for interest rates on deposits with a view to ensure financial sustainability of

Savings Schemes;

(l) amount to be excluded in computing the court fee chargeable under the Court-fees Act, 1870

(7 of 1870) for the purpose of section 8 of the Act;

(m) mechanism for redressal of grievances and settlement of disputes;

(n) any other matter which is required to be or may be, prescribed.]

(3) Every rule made under this section shall be laid as soon as may be after it is made before each

House of Parliament while it is in session for a total period of thirty days which may be comprised in one
session or [3][in two or more successive sessions, and if, before the expiry of the session immediately
following the session or the successive sessions aforesaid] both Houses agree in making any modification
in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect only
in such modified form or be of no effect, as the case may be; so however that any such modification or
annulment shall be without prejudice to the validity of anything previously done under that rule.]

**4[16. Repeal and savings.—(1) The Government Savings Certificates Act, 1959 (46 of 1959) and the**

the Public Provident Fund Act, 1968 (23 of 1968) are hereby repealed.

(2) Notwithstanding such repeal and without prejudice to the provisions contained in the General

Clauses Act, 1897 (10 of 1897), with respect to repeals—

(a) anything done or any action taken or purported to have been done or taken, including any rule,

notification, order or notice made or issued or any direction given under the repealed enactments shall
be deemed to have been done or taken under the corresponding provisions of this Act;

(b) subject to the provisions of clause (a), any instrument executed or certificate issued, or

anything done under or in pursuance of any repealed enactment shall, if is in force at the
commencement of Part I of Chapter VIII of the Finance Act, 2018, continue to be in force in so far as
it could have been executed, or issued or done under or in pursuance of such Part, shall have effect as
if the same has been executed, issued or done under or in pursuance of the provisions contained in the
aforesaid Part;

(c) all deposits made or accounts or certificates held under the repealed enactments shall be

deemed to be deposits or holdings in the Savings Scheme made under the corresponding provisions of
this Act; and

(d) any proceeding under the repealed enactments pending immediately before the

commencement of Part I of Chapter VIII of the Finance Act, 2018 before any court shall, subject to
the provisions of this Act, continue to be heard and disposed of by the said court.

1. Subs. by Act 13 of 2018, s. 133, for clause (g) (w.e.f. 1-4-2018).
2. Subs. by s. 133, ibid., for clause (i) (w.e.f. 1-4-2018).
3. Subs. by Act 20 of 1983, s. 2 and Sch. (w.e.f. 15-3-1984).
4. Ins. by Act 13 of 2018, s. 134 (w.e.f. 1-4-2018).

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(3) The repeal shall not prejudicially affect the interest of depositors who, before the commencement

of Part I of Chapter VIII of the Finance Act, 2018, made deposits or were issued certificates or made
contribution to any scheme under the repealed enactments.

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THE SCHEDULE

[See section 3A]

This Act applies to the following Government Savings Schemes:

PART A

EXISTING SAVINGS SCHEMES

1. Post Office Savings Account

2. National Savings Monthly Income (Account)

3. National Savings Recurring Deposit

4. Sukanya Samridhhi Account

5. National Savings Time Deposit (1 year, 2 years, 3 years and 5 years)

6. Senior Citizens' Savings Scheme

7. Savings Certificates:—

_(a)Kisan Vikas Patra (discontinued from 1st December, 2011 and restarted from 23rd_

September, 2014);

_(b)National Savings Certificates (VIII Issue)._

8. Public Provident Fund Scheme

PART B

DISCONTINUED SAVINGS SCHEMES

1. National Savings Scheme, 1987

2. National Savings Scheme, 1992

3. Block Deposit Account

4. Defence Savings Account

5. Gift Coupons

6. Cumulative Time Deposit Accounts:—

(a) 5-year account

(b) 10-year account

(c) 15-year account

7. 5-year Prize Bonds

8. 5-year Premium Prize Bonds

9. 5-year Compulsory Deposit Account Scheme, 1963

10. 5-year Fixed Deposit Account

11. 5-Year Cash Certificates

12. 10-Year Defence Savings Certificates

13. 12-Year National Savings Certificates

14. 7-Year National Savings Certificates

15. 5-Year National Savings Certificates

16. 10-Year Treasury Savings Deposits Certificates

17. 15-Year Annuity Certificates (I series)

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18. 10-Year National Plan Savings Certificates

19. 10-Year Treasury Savings Deposits Certificates

20. 12-Year National Plan Savings Certificates

21. 15-Year Annuity Certificates (II series)

22. 10-Year Defence Deposit Certificates

23. 12-Year National Defence Certificates

24. 10-Year National Savings Certificates (I-Issue)

25. 7-Year National Savings Certificates (II-Issue)

26. 7-Year National Savings Certificates (III-Issue)

27. 7-Year National Savings Certificates (IV-Issue)

28. 7-Year National Savings Certificates (V-Issue)

29. 12-Year National Savings Annuity Certificates

30. 5-Year National Development Bonds

31. 6-Year National Savings Certificates (VI-Issue)

32. 6-Year National Savings Certificates (VII-Issue)

33. 10-Year Social Security Certificates

34. Indira Vikas Patras

35. 10-Year National Savings Certificates (IX-Issue).]

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