ICICI Bank Ltd has announced a new digital service through which existing customers of the bank can open a Public Provident Fund (PPF) account instantly online. PPF is a fixed income instrument designed to achieve long-terms goals. PPF fits in almost all types of portfolios, as the returns are better compared to its peers, like fixed deposits.
Till a few years ago, only post offices and two nationalised banks—State Bank of India and Punjab National Bank—offered services to open PPF accounts. But in the past few years, besides other nationalised banks, some private banks have also started offering this service. Also, till now, an applicant had to visit a bank or a post office branch to complete the process of opening a PPF account. Even in the existing online PPF account opening facilities, including that of State Bank of India as well as ICICI Bank, the online facility was limited to filling the application form online. The applicant had to print the form and submit it to a bank branch along with KYC documents.
"With the new facility, customers of the bank are no longer required to visit a branch and submit physical documents to open a PPF account," ICICI Bank said in a press release.
How it works
The current offering by ICICI Bank is only for its existing customers who have a savings bank account with the bank. To use the service, they have to login to the bank's internet banking portal or mobile app. In order to open a PPF account, the bank's customer is required to confirm auto populated details like PAN, address and needs to enter PPF specific details like the initial deposit amount. The statement of transaction as well as the annual statement of the PPF account is available on internet banking.
To complete the process, the bank is using Aadhaar-based KYC and e-signature. This means that at the submission stage, you will have to provide your Aadhaar number and you will receive a one-time password (OTP) on your Aadhaar registered mobile number. The facility will not work without Aadhaar.
Once this process is completed, you will instantly be able to see your PPF account number on the screen.
Transfer of PPF account
The PPF ecosystem allows you to transfer the account from one bank or post office branch to another. But not so with the new process launched by the bank—you cannot move your existing PPF account to ICICI Bank online. To transfer, you have to use the offline process, which includes submitting a PPF transfer request to the bank or post office where you currently hold the account.
Upon receiving a request from the account holder, the existing bank or post office will process the discontinuation request. It will transfer the original documents such as the account opening application, nomination form, specimen signature and others, along with a cheque or demand draft of the outstanding balance in the PPF account to the branch of the bank or post office mentioned by the account holder in her request.
Once these documents are received at the new bank branch, you will need to submit a fresh PPF account opening form, and a nomination form, along with the original PPF passbook and a fresh set of KYC documents. This will be a new account with a new account number.
Future Focus take
The new online facility is better than the existing online PPF account opening facilities as it does not involve visiting the branch along with documents for a physical verification. But the facility is only for existing bank customers. So if you are an existing ICICI Bank account holder looking to open a PPF account, this process eases your effort. But if you are not an ICICI Bank savings account holder, the new process will not be of much help to you. It is, however, probable that other banks with PPF facilities will follow suit and adopt the Aadhaar-based KYC to ease the process.
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