Amalgamation of PPF Accounts : Department of Posts issued Circular

Amalgamation of PPF Accounts : Department of Posts issued Circular An individual cannot have more than one account in the Public Provident Fund (PPF) Scheme, according to the rules. Many people, however, accidentally open multiple PPF accounts; for example, they may have opened PPF accounts with two separate banks or with a post office and a bank. So, what are the ramifications of such a situation and what should a person do? The Department of Posts issued a circular giving details of the process of merging multiple PPF accounts into one single PPF account. why there is need to amalgamate PPF accounts? Whenever any depositor has opened more than one PPF Accounts, the second and subsequent accounts opened are treated as irregular, as an individual can open only one single account under PPF Scheme. Circular indicating some points -

• In such cases, considering the requests of the .PPF subscribers, Department of Economic Affairs, Ministry of Finance regularizes such irregular accounts/deposits by amalgamating more than one PPF accountg into one account, in relaxation of rules.
• On receipt of the concurrence of Ministry of Finance for amalgamation of more than one PPF accounts, which were opened irregularly, the Post Offices shall follow the Standard Operating Procedure which is attached herewith, for amalgamation of accounts.
• If there is any outstanding loan in any of the PPF account to be merged, the depositor shall be requested to repay the entire outstanding loan amount along with the interest. That is, if there is any PPF loan account, it should be closed before the amalgamation of accounts is done.
• During the process of amalgamation, the interest calculation is required to be done manually by the Head Post Offices. The interest calculation shall be done by the Post Office Counter Officials and verified and authorized by Supervisor / In'Charge, SBCO.

How one can merge multiple PPF Accounts :

If Amount of PPF deposits does not exceed the set limit

An individual will be able to keep the PPF account of his choosing if the total amount of deposits made in both accounts is less than the prescribed deposit ceiling (currently it is Rs 1.5 lakh per financial year). If the PPF accounts are handled by the same operating agency (for example, if you have multiple PPF accounts with separate banks or two accounts with the post office), the merging can be completed quickly utilising the PPF account transfer method. However, if a PPF account has been opened with both; a bank and a post office (i.e., distinct operating agencies), the PPF account holder will be required to submit a request for PPF account merger with either the bank or the post office where he or she desires to keep the PPF account. A photocopy of the PPF passbook/statement of account must be submitted with the merger request. The PPF account office will send the details to the other office where the PPF account to be combined is held once the request has been submitted. The annual deposits made by the account holder in all PPF accounts will be calculated by the office where the PPF account must be kept. Keep in mind that your annual deposits should not exceed the government's established deposit limit. The request for account closure and balance transfer will be sent to the other office once it is determined that the deposits have not exceeded the prescribed limit. The preserved account's opening date shall be regarded the PPF account's real opening date. This date will be used to calculate the maturity date as well as for other purposes such as loans, withdrawals, and so on. Furthermore, the date of transfer/credit of the balance in the maintained PPF account is assumed to be the date of deposit for the purposes of loans, withdrawals, and other transactions.

If Amount of PPF deposits exceeds the set limit

It is possible that the total amount of deposits made in numerous PPF accounts will surpass the statutory limit. In this case, the excess amount in the PPF account that exceeds the prescribed deposit limit will be repaid to the individual when the account is merged. This money will be returned to you without interest. Before moving the balance to the retained PPF account, the PPF account office will adjust the interest. The date of the retained account's opening will also be used as the PPF account's actual opening date. This date will be used to calculate the maturity date as well as for other purposes such as loans, withdrawals, and so on. Furthermore, the date of transfer/credit of the balance in the maintained PPF account is assumed to be the date of deposit for the purposes of loans, withdrawals, and other transactions.

Illustration of Merging of PPF Account

Account 1 opened on 04.04.2018

Date	Transaction	Amount in Rs.	Balance in Rs.
04-04-2018	Deposit	150000	150000
31-03-2019	Interest	10500	160500
03-04-2019	Deposit	120000	280500
31-03-2020	Interest	19635	300135
03-04-2020	Deposit	140000	440135
31-03-2021	Interest	30809	470944
05-04-2021	Deposit	100000	570944

Account 2 opened on 04.04.2020

Date	Transaction	Amount in Rs.	Balance in Rs.
04-04-2020	Deposit	20000	20000
05-10-2020	Deposit	40000	60000
31-03-2021	Interest	2800	62800
09-04-2021	Deposit	10000	72800

Amalgamation of the above Two Accounts

Date	Transaction	Amount (Rs.) in Account 1	Amount (Rs.) in Account 2	Total Deposit in FY concerned	Excess Deposit to be refunded	Excess Interest to be deducted
04-04-2018	Deposit	150000
31-03-2019	Interest	10500		150000
03-04-2019	Deposit	120000
31-03-2020	Interest	19635		120000
03-04-2020	Deposit	140000
04-04-2020	Deposit		20000		10000	700
05-10-2020	Deposit		40000		40000	1400
31-03-2021	Interest	30809	2800	200000
05-04-2021	Deposit	100000
09-04-2021	Deposit		10000
	Total	570944	72800		50000	2100