#THE GOVERNMENT SAVINGS PROMOTION ACT, 1873 
__________ 

##ARRANGEMENT OF SECTIONS 
__________ 

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. 

 
 
#THE GOVERNMENT SAVINGS PROMOTION ACT, 1873  

##ACT NO. 5 OF 1973

[28th January, 1873.] 

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 Promotion Act, 1873. 

**Local extent.**—It extends to the whole of India. 

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). 

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 

      (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*

4. **Nomination by depositor.**—(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.
 
(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. 

(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. 

(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 Authorised Officer of  the  Government  Savings  Bank  in  which  the 
deposit is, then— 

  (a) if the deposit does not exceed such limit as may be prescribed the 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 deceased in accordance with such procedure as may be prescribed.

5. **Payment to be a discharge.**— 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 s o 
paid 

**Saving  of  right  of  executor.**— 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. 
 
**Saving of right of creditor.**—Every creditor or claimant against the estate of the deceased 
may recover his debt or claim out of the money paid under this Act, to any person, and remaining 
in his hands unadministered, in the same manner and to the same extent as if that person had obtained 
letters of administration of the estate of the deceased. 

6. **Security for due administration.**—The Authorised Officer of a Government  Savings 
Bank may  take  such  security  as  he  thinks  necessary  from  any  person 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 Authorised Officer of 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). 

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 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 property11: 

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 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, or on behalf of, a 
minor, may be paid to him personally, if he made the deposit, or to his guardian 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 receipt of the minor or  guardian,  for  money  paid  to  him  under  this  section,  shall  be  a 
sufficient discharge therefor. 

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 Authorised Officer of  the 
Government Savings Bank in which his deposit may be, 

such Authorised Officer may, from time to time, make payments out of the deposit to 
guardian, 

and the receipt of 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, payments shall be 
be made to such committee or manager. 

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.

13. *[Payment of married women’s deposits.]  Omitted by the Finance Act*, 2018 (13 of 2018), s. 130 
(*w.e.f.* 1-4-2018). 

*Miscellaneous*

14. **Protection of action taken in good faith.**—No suit or other legal proceeding shall lie against the 
Authorised Officer or any other officer of the Central Government in respect of anything which is in 
good faith done or intended to be done under this Act. 

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:— 

  (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; 
 
  (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; 

  (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; 

  (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 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.

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. 

(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. 



###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) 
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).