RBI asks banks to accept PPF deposit up to Rs 1 lakh a year

MUMBAI: The Reserve Bank on Monday asked banks to accept deposits up to Rs 1 lakh under the Public Provident Fund (PPF).

As many as 25 public and private sector lenders accept deposits under the PPF scheme. Recently, the government has raised the annual investment ceiling in PPF savings to Rs 1 lakh from the present limit of Rs 70,000.

Besides, interest rate on PPF increased to 8.6 per cent from 8 per cent.

The decision to hike interest rate is part of the recommendations of Shyamala Gopinath Committee to make small savings schemes more attractive and returns would be in sync with market rates.