How to deal with Bank, who is not opening Minor’s PPF Account?

Sumit had recently tried to open a PF account for his new born child. But the State Bank of India branch, where he has his PF account, declined to open the same. And said that PPF account for minor are no longer available through some RBI notification in year 2009, the same has been stopped. Though it had been opened for his other minor child a few years ago (in year 2008).

As per Clause 3 of the Provident Fund Scheme, 1964 (1968) 69 ITR (St.) 5 as amended from time to time reads as under:

“Any individual may, on his behalf or on behalf of a minor of whom he is the guardian, subscribe to the Public Provident Fund (hereinafter referred to as the “Fund”) any amount not less than Rs.500 and not more than Rs.70,000 in a year”.

So any parent can open minor’s PPF acount.

On complaints from many banks and post offices for declining to open accounts in the name of minors, the Reserve Bank of India has issued a clarification vide RBI/ 2009-2010/ 365 dated March 29, 2010, addressed to all banks authorised to operate the PF account as under:

“In view of complaints being received about non-opening of accounts for minor by some agency banks, it is reiterated that as per Rule 3(1) of PPF Scheme, 1968, an individual may, on his own behalf or on behalf of a minor, of whom he is the guardian, subscribe to the Public Provident Fund. Further, it is reiterated that as clarified, vide Ministry of Finance letter F.7/34/88-NS II dated November 17, 1989, either father or mother can open a PPF account on behalf of his/ her minor child but not both”.

So if you face any issues in opening an Minor PPF account, please point out the Circular to the bank, which is bound to open the account for the minor.