OFFICE MEMORANDUM ISSUED BY MINISTRY OF FINANCE

No. 6-1/2011-NS.II (Pt.)
Ministry of Finance
Department of Economic Affairs
(Budget Division)

New Delhi, the 11^th November, 2011.

OFFICE MEMORANDUM

Sub:   Decisions on the recommendations of the Committee for Comprehensive Review of National Small Savings Fund (NSSF).

The Thirteenth Finance Commission in its Report had, inter alia, recommended that all aspects of the design and administration of the NSSF be examined with the aim of bringing transparency, market linked rates and other much needed reforms to the scheme. As a follow up of this recommendation, the Government had constituted a Committee on 8th July, 2010, headed by Smt. Shyamala Gopinath, the then Deputy Governor, Reserve Bank of India for comprehensive review of NSSF. The terms of reference of the Committee included review of the existing parameters for the small saving schemes in operation and recommend mechanisms to make them more flexible and market linked; review of the existing terms of the loans extended from the NSSF to the Centre and States and recommend on the changes required in the arrangement of lending the net collection of small savings to Centre and States; review of other possible investment opportunities for the net collections from small savings and the repayment proceeds of NSSF loans extended to States and Centre; review of the administrative arrangement including the cost of operation; and review of the incentives offered on the small savings investments by the States.

2. The Committee submitted its report to the Government on 7^th June, 2011. Comments/views of Department of Posts, Department of Revenue, Department of Financial Services, Department of Expenditure and all State/Union Territory Governments were sought on the recommendations made by the Committee.

3. The recommendations of the Committee have been considered in detail, taking into account the views/comments received from other Departments, States/UTs and representations received from various agents’ associations and others. After detailed examination the following decisions have been taken:-

Rationalisation of Schemes

(i)         The maturity period for monthly Income Scheme (MIS) and National Savings Certificate (NSC) will be reduced from 6 years to 5 years.

(ii)             A new NSC instrument, with maturity period of 10 years, would be introduced.

(iii)           Kisan Vikas Patras (KVPs) will be discontinued.

(iv)      The annual ceiling on investment under Public Provident Fund (PPF) Scheme will be increased from Rs.  70,000 to Rs.  1 lakh.

(v)                Interest on loans obtained from PPF will be increased to 2% p.a. from existing 1% p.a.

(vi)      Liquidity of Post Office Time Deposit (POTD) – 1, 2, 3 & 5 years – will be improved by allowing pre-mature withdrawal at a rate of interest 1% less than the time deposits of comparable maturity. For pre-mature withdrawals between 6-12 months of investment, Post Office Savings Account (POSA) rate of interest will be paid.

Interest Rates on Small Savings Instruments

(i)               The rate of interest paid under Post Office Savings Account (POSA) will be increased from 3.5% to 4% p.a.

(ii)             The rate of interest on small savings schemes will be aligned with G-Sec rates of similar maturity, with a spread of 25 basis points (bps) with two exceptions. The spread on 10 year NSC (new instrument) will be 50 bps and on Senior Citizens Savings Scheme 100 bps. The interest rates for every financial year will be notified before 1^st April of that year.

(iii)        Assuming the date of implementation of the recommendations of the Committee as 1st December, 2011, the rate of interest on various small savings schemes for current financial year on the basis of the interest compounding/payment built in the schemes, will be as given below:-

Instrument	Current Rate (%)	Proposed Rate (%)
Savings Deposit	3.50	4.0
1 year Time Deposit	6.25	7.7
2 year Time Deposit	6.50	7.8
3 year Time Deposit	7.25	8.0
5 year Time Deposit	7.50	8.3
5 year Recurring Deposit	7.50	8.0
5-year SCSS	9.00	9.0
5 year MIS	8.00 (6 year MIS)	8.2
5 year NSC	8.00 (6 year NSC)	8.4
10 year NSC	New Instrument	8.7
PPF	8.00	8.6

(iv)       Payment of 5% bonus on maturity of MIS will be discontinued.

Commission to Agents

(i)                 Payment of commission on PPF schemes (1%) and Senior Citizens Savings Scheme(0.5%) will be discontinued.

(ii)             Agency commission under all other schemes (except MPKBY agents) will be reduced from existing 1% to 0.5%.

(iii)             Commission at existing rate of 4% will continue for Mahila Pradhan Kshetriya Bachat Yojana (MPKBY) agents.

(iv)              Incentives, if any, paid by the State/UT Governments will be reduced from the commission paid by the Central Government.

Investments from NSSF

(i)         The minimum share of States in net small savings collections in a year, for investment in State Governments Securities, will be reduced from 80% to 50%. The remaining amount will be invested in Central Government securities or lent to other willing States or in securities issued by infrastructure companies/agencies, wholly owned by Central Government.

(ii)       Yearly repayment of NSSF loans made by Centre and States, will be reinvested in Central and State Government securities in the ratio of 50:50.

(iii)      The period of repayment of NSSF loans by Centre and States will be reduced to 10 years, with no moratorium.

(iv)              For the current financial year the prevailing interest rate of 9.5% will continue. From 1st April, 2012 revised interest rate will be notified.

(v)             Half yearly payment of interest by the Centre and the States will be introduced.

(vi)              Interest rate on existing investments from NSSF in Central Government securities till 2006-07 will be re-set at 9% and on those from 2007-08 till 2010-11 will be re-set at 9.5%.

Operational Issues of NSSF

(i)                       A Monitoring Group drawn from Ministry of Finance, Reserve Bank of India, Department of Posts, State Bank of India, other select banks and select State Governments will be set up to resolve various operational issues like reducing the time lag between collection and investment, etc.

4. Necessary notifications, including those requiring amendments to rules of various small saving schemes and National Small Savings Fund (Custody & Investment) Rules, 2001 will be notified separately. The above decisions will take effect from the dates to be specified in the notifications.

5. This has the approval of Finance Minister.

(Shaktikanta Das)
Addl. Secretary to the Govt. of India

SMALL SAVINGS SCHEMES TO FETCH BETTER RETURNS NOW

NEW DELHI: Your investments in the small savings scheme -- post office savings scheme, National Savings Certificate, and public provident fund - will soon start earning higher interest rates that are benchmarked to market rates. 

The annual interest rate available on these schemes is at present below what an investor can get from bank deposits of comparable maturity. 

The government has announced a complete overhaul of the small savings scheme that has benchmarked rates of interest on these schemes to government securities, introduced a 10-year national savings certificate (NSC), increased the ceiling for public provident fund deposits to one lakh rupees every year and discontinued the Kisan Vikas Patra. 

The new rules will kick in when the government issues a notification. 

The decisions are based on the recommendations by a high level expert panel headed by former deputy governor of the RBI, Shaymla Gopinath. 

As per the memorandum issued by the finance ministry, returns on small savings instruments will be linked to government securities of similar maturities, pushing up the current rates on all instruments by 0.2%- 1.3%. 

Interest rates on postal savings will go up to 4% from 3.5% at present. 

In addition, the maturity period of monthly investment schemes and national savings certificates will be reduced form six to five years. 

The ceiling on annual contributions to the public provident funds will also be raised to 1 lakh from 70,000. 

The reforms will address the distortion caused by the small savings schemes in the overall interest rate structure of the economy. Depending on the market rates, these schemes either saw a large inflow of the big outflow, affecting the flows into banks in particular. 

When market rates are low, the high interest rates on small savings become a kind of subsidy to the investors.

In the event, as is the case now, when interest rates on these schemes are below the market rates they see a big outflow, affecting the government's fiscal management, as funds from these schemes are used by state governments and the centre. 

With bank deposits yielding more than 9% per annum, there has been a net outflow from the small savings schemes, which are administered by the National Small Savings Fund (NSSF), in the current year. 

This has forced the government to increase market borrowings by 52,800 crores over its budgeted fiscal target. 

The benchmarking of interest rates on small savings schemes will end this distortion, and also cut the volatility in inflows into these schemes. 

To reduce the cost of administration of the scheme, the government has also decided to lower the commission charged by agents that sell these schemes. 

As per the memorandum, the payment of agency commission on all schemes, except the Mahila Pradhan Kshetriya Bachat Yojana, will be either discontinued or reduced by at least 0.5%. Women agents will continue to receive 4% 

VAIKOM AREA CONVENTION

       The  Vaikom area Convention of  FNPO Unions  was held on 10.11.2011 at Vyapara Bhavan hall, Vaikom. The meeting was presided by       Shri.V.T.Uthup, State Asst. Secretary NUPE Group ‘C’.   Smt. Sreeletha Balachandran, Municipal Chairperson, Vaikom  inaugurated  the convention and the official web site of FNPO KOTTAYAM DIVISION.  Prominent Congress leaders Adv.V.V.Sathyan KPCC Member, Sri. P N Babu President Vaikom Block Congress Committee, Sri. B Anilkumar DCC General Secretary, Sri. Mohan D Babu KPCC Member, Sri. Bobin, Sri. K N Sreekumar  and our divisional level leaders addressed the convention.

A seminar and detailed discussion on various issues relating to GDS employees were also conducted.  

The Universal Postal Union (UPU, French: Union postale universelle) is an international organization that coordinates postal policies among member nations, in addition to the worldwide postal system. The UPU contains four bodies consisting of the Congress, the Council of Administration (CA), the Postal Operations Council (POC) and the International Bureau (IB). It also oversees two cooperatives including the Telematics and EMS Cooperatives respectively. Each member agrees to the same terms for conducting international postal duties. The UPU’s headquarters are located in Bern, Switzerland.

French is the official language of the UPU. English was added as a working language in 1994. The majority of the UPU's documents and publications – including its flagship magazine, Union Postale - are available in the United Nations' official languages.

The UPU was created in 1874, initially under the name "General Postal Union", as a result of the Treaty of Bern signed on October 9, 1874. Four years later, the name was changed to "Universal Postal Union.

The UPU established that:

1. There should be a uniform flat rate to mail a letter anywhere in the world
2. Postal authorities should give equal treatment to foreign and domestic mail
3. Each country should retain all money it has collected for international postage.

One of the most important results of the UPU Treaty was that it ceased to be necessary, as it often had been previously, to affix the stamps of any country through which one's letter or package would pass in transit. The UPU provides that stamps of member nations are accepted for the entire international route.

SYLLABUS OF CONFIRMATION EXAMINATION OF PAS

Syllabus of Confirmation Examination of PAs


Paper -1 with the aid of books


PO GUIDE Part - 1
Volume - V
Volume- VI Part I, II, and III

Paper - II (Practical) Without the aid of Books


Preparation of Daily accounts, Registered list, etc..Knowledge regarding Premium Products etc

TRAINING FOR POSTMASTER CADRE GRADE-1 EXAM

COMPENDIUM ON PROCESSING AND DISPOSAL OF PUBLIC COMPLAINTS


1.SEARCH BILL is not issued in the case of speed post complaints


  Ans.True


2.complaints relating to international speed post articles should be made within


  Ans.2 months


3.........................  facilitates quick disposal of international speed post complaints.


  Ans.Rugby System


4.............................  i s   a n   Internet   based   system  developed   by   EMS
Cooperative for use by the postal administrations to respond to the EMS enquiries.


  Ans.Rugby system


5.Expansion of  WPOD is...............................


  Ans.Written Proof Of Delivery


6.Expansion of COPRA is...............................


  Ans.Consumer Protection Act.


7.Dak Adalats are held at circle level once in every....................


  Ans. 3 months/quarter


8.Post Forum was introduced on


  Ans.10/09/1990


9. Post Forum shall consist of not more than 


  Ans.7 members


10.The PRI(P) should verify the delivery of ............ articles  everyday


  Ans.120.

FNPO KOTTAYAM DIVISION- TOUR

The shyamala gopinath committee recognises that the RD scheme requires considerable effort on part of agents in mobilizing monthly deposits. However, 4% commission is distortionary and expensive. The committee recommends that this should be brought down to 1% in a phased manner in a period of three years with a 1% reduction every year .

TRAINING FOR POSTMASTER CADRE GRADE-1 EXAM

COMPENDIUM ON PROCESSING AND DISPOSAL OF PUBLIC COMPLAINTS


1.Who is the head of public grievance cell in department of posts?


Ans.Deputy Director General (Public Grievances & Quality Assurance)




2.Complaint relating to unregistered articles should be reported within


Ans.6 months


3.Complaint relating to registered articles should be reported within


  Ans.3 months


4.Ex-gratia payment of Rs............ is permissible in respect of loss of    Registered letter or its contents having intrinsic value


  Ans.Rs.100/-


5.If addressee of the VP article complains that he has been defrauded by the
sender,then


   Ans.the payment of VPMO should be withheld till enquiry is completed


6. ......................... should be refunded to the complainant when delay in  payment or non-payment of TMO has been caused due to service fault.


   Ans.telegraphic charges


7.The time limit to dispose foreign complaints is 


  Ans.3 months 


8. ...................are the nodal offices which shall be responsible for entertaining all complaints relating to domestic as well as international Speed Post EMS complaints


 Ans.Speed Post Concentration Centre (SPCC)


9.A complaint regarding domestic speed post shall be entertained upto............  from the date of booking.


  Ans.one month


10.All ............. are due bags as notified by Directorate Memo No.43-24/90-D dated 17.9.91.


  Ans.speed post bags

TRAINING FOR POSTMASTER CADRE GRADE-1 EXAM

PAPER 1

Compendium on Processing and Disposal of  Public Complaints

1.Name of the nodal points of grievance redressal  system in INDIAPOST.

 Ans.Customer Care Centre (CCC)

2.User ID and passwords for CCC's are created by

 Ans.PTC Mysore

3.CCC'S are interconnected through a webbased system at the link

 Ans.www.indiapost.gov.in/CCClogin.asp

4.The system of recording, indexing, classification, inquiries and procedures relating to .............

are an index of state of health of an organization.

 Ans.Grievances

5.The  postal department setup grievance redressal machinery in

 Ans.1948

6.The complaints are acknowledged, registered andclassified under ............. categories while being registered in the web based customercare system at the customer care centre.

 Ans.11

7.Every ............... is the nodal operative and administrative unit for the disposal of public complaints relating to postal services rendered by post offices under its control.

 Ans.Divisional office

8.All complaints pending over .................. will be brought to the notice of circle office for seeking guidance for their settlement

 

 Ans.one month

9.Chief Postmaster General or Regional Postmaster General in charge of his jurisdiction is assisted by the .................. in handling grievance redressal system

 Ans.DPS

10...................... is the coordinating link between Postal Directorateand the Circle in  grievance redressal system

 Ans.CPMG

SPECIAL CASUAL LEAVE FOR UNION ASSOCIATION ACTIVITIES

Government servants who are union office bearers and delegates of the Central Government employees unions/associations may be granted special casual leave to attend the activities of Unions/Associations.

(a)
An office bearer of a recognized service association/union of Central Government employees may be granted special casual leave up to a maximum of 20 days in a calendar year, for participation in the activities of Associations/Unions.

(b)
Outstation/delegate members of executive Committee of recognized All India Association/Federation may be granted special casual leave up to 10 days in a calendar year to attend its meetings and

(c)
Similarly the local delegates/local members of executive committees of all recognized Associations/unions Federations may be granted special casual leave up to 5 days in a calendar year for attending meetings of such Associations/Unions/Federations.

Those availing special casual leave as office-bearers will not be entitled to avail special casual leave separately in their capacity as Delegate/Committee members.

Where a Union/Association/Federation follows a year other than the calendar year for the purposes of its annual elections, the entitlement of special casual leave should be regulated in terms of the year actually followed by such Union/Association/Federation in place of the calendar year. When an office-bearer comes into office during the course of the year in casual vacancies, the competent authority has the discretion to grant special casual leave up to the maximum entitlement in a full year, having regard to the genuineness and merits of each particular case.

(MHA OM No. 27/3/69-Estt(B), dated 8.4.69 & Deptt. of Personnel OM No. 8/13/72-JCA, dated 4th September, 1972)

At the request of the leader of the Staff Side, the Head of the Department/Office may grant special casual leave not exceeding five days in a year, to a member of the Staff side to enable him to attend Staff side Consultations.

Similarly the leader of the Staff Side and, at and above the Departmental Joint Council level, one Secretary from the Staff Side designated as such by the leader, may be allowed additional special leave not exceeding 10 days in a year for preparing staff side cases. This will be in addition to the provisions regarding grant of special casual leave for association activities contained in OM No. 27/3/69-Estt(B), dated the 8th April, 1969.

(MHA OM No. 8/6/70-JCA, dated 30.10.70)

DIVISIONAL WORKING COMMITTEE

The first divisional working committee of the newly elected office bearers of Kottayam Division will be conducted on 07.10.2011, Friday at FNPO union office, Pulicakal Trade center, Kottayam at 10.00 AM. Meeting will be presided by Sri. V T Uthup, President, FNPO Kottayam Division.  

LGOS NEED NOT WANT TO WAIT FOR TRAINING

It has been ordered vide Postal Directorate vide letter No. 60/11/2011-SPB-I dated 16.-9.2011 that the PA/SA LGO candidates selected through departmental examination will be imparted a brief in-housetraining of two week, pending regular Institutional Induction Training at Postal Training Centres. It has been further stated that the two week's training shall be finalized by the Heads of the Circles in consultation with the Training Division.

2. In respect of direct recruit PAs/SAs, para (5) of Postal Directorate letter No. 60-9/2010-SPB-I dated 10.11.2010 had stated that" pending their training by chalking out the course as far as posting orders and commence their in-house training by chalking out the course as far as possible based on the PTC syllabus depending on the resources available with them". Accordingly, direct recruit PAs/SAs were imparted in-house training at Circle level before they were deputed to PTCs. It, is therefore, requested that the PA/SA LGO candidates selected through departmental examination may also be imparted in-house training of two weeks similar to the one done in respect of direct recruit PAs/SAs.