Quick answerRBI clarifies that PPF accounts opened by juristic persons (HUFs, trusts, etc.) on or after May 13, 2005, are void and must be closed with deposit refunds (no interest). Existing accounts continue normally but extensions are subject to new rules.
What changed
Government amendments effective May 13, 2005, restrict small savings scheme investments to individuals only. Any PPF accounts opened by juristic persons (like HUFs, trusts, provident funds) on or after that date are considered void ab initio and must be closed immediately with principal refunded but no interest paid.
What it means for you
Banks must identify and close any PPF accounts opened by non-individuals after May 13, 2005, without paying interest. Existing accounts opened before that date remain valid until maturity, but any extension of such accounts will follow the new restrictive rules. This tightens compliance and prevents misuse of PPF by entities.
What you must do
Identify all PPF accounts opened by juristic persons (HUFs, trusts, etc.) on or after May 13, 2005, and close them immediately.
Refund the deposit amount to the depositor without any interest for void accounts.
Allow existing accounts opened before May 13, 2005, to continue normally, but apply new rules for any extension requests.
Issue clear instructions to all designated branches operating the PPF Scheme to ensure strict compliance.
Who it affects
Banks operating PPF accounts (SBI, associate banks, and other listed public sector banks), Juristic persons (HUFs, trusts, provident funds) who opened PPF accounts on or after May 13, 2005, Individual PPF account holders with existing accounts
Regulatory timeline
Stated effective dateeffective May 13, 2005
Decoded by BankPulse2026-06-19 20:40 IST
Superseded by — Public Provident Fund Scheme 2019
Status change: superseded08 Jul 2026, 13:17 IST
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
What happens to PPF accounts opened by HUFs or trusts after May 13, 2005?
They are considered void from the start. Banks must close them and refund the deposit without any interest.
Can existing PPF accounts of juristic persons continue?
Yes, accounts opened before May 13, 2005, can continue until maturity as per old rules. But any extension of such accounts will be subject to the new amendments.
Are joint accounts by individuals affected?
No, the restriction applies only to juristic persons. Individual accounts (single or joint) and guardian accounts for minors/unsound mind are not affected.
📜 Read the original circular — full text as issued by RBI
RBI/2004-05/480
Ref.No.CO.DT.15.02.001/H-9844-9866/2004-05
May 25, 2005
Jyeshtha 4, 1927 (S)
The General Manager Government Accounts Department
State Bank of India and Associate Banks
Allahabad Bank / Bank of Baroda / Bank of India /
Bank of Maharashtra / Canara Bank / Central Bank of India /
Corporation Bank / Dena Bank / Indian Bank /
Indian Overseas Bank /Punjab National Bank / Syndicate Bank /
UCO Bank / Union Bank of India / United Bank of India /
Dear Sir,
Public Provident Fund Scheme, 1968 - Clarifications
Please refer to our Circular No.CO.DT.15.02.001/H-9593-9615/2004-05 dated May 14, 2005 forwarding therewith Government of India Notification dated May 13, 2005 issued by Ministry of Finance, amending the provisions of the PPF Scheme, 1968 with effect from May 13, 2005.
2. In this regard, Government of India, Ministry of Finance vide letter F.No.2/8/2005-NS-II dated May 20, 2005 have, inter alia, issued the following clarifications :
i)Sequel to amendments to various Small Savings Schemes to restrict the scope of investments only to individuals , the accounts, if any, opened by juristic persons (HUFs, Trusts, Provident Funds, etc.) i.e. persons other than individuals (through single or joint accounts or deposits by guardians on behalf of minors and persons of unsound mind as per rules) on or after May 13, 2005, under any of the small savings scheme including Public Provident Fund Scheme, 1968, shall be treated as void ab initio and immediate action should be taken to close such accounts and to refund the deposits without any interest to the depositors.
ii)It may, however, be noted that the above amendments shall not be applicable to the existing accounts opened in accordance with the rules in operation prior to the amendments dated May 13, 2005. These shall continue till maturity and deposits/withdrawals in/from these accounts shall be allowed to be made in accordance with the said rules. However, any extension of existing accounts shall be subject to the amendments dated May 13, 2005.
3. In view of the above, you may please issue suitable instructions to all your designated branches / offices operating the PPF Scheme, 1968 and ensure strict compliance with the same.
4. Please acknowledge receipt.
Yours faithfully,
(D.Rajagopala Rao)
Deputy General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2004-05/480 · issued 25 May 2005. The plain-English explanation above is BankPulse’s own independent summary.
Test yourself
Quick self-check built only from the facts already on this page — tap a question to reveal the answer.
Q1. In one line, what does this circular do?
RBI clarifies that PPF accounts opened by juristic persons (HUFs, trusts, etc.) on or after May 13, 2005, are void and must be closed with deposit refunds (no interest). Existing accounts continue normally but extensions are subject to new rules.
Q2. Who does this circular apply to?
Banks operating PPF accounts (SBI, associate banks, and other listed public sector banks), Juristic persons (HUFs, trusts, provident funds) who opened PPF accounts on or after May 13, 2005, Individual PPF account holders with existing accounts
Q3. What is the first thing you should do about it?
Identify all PPF accounts opened by juristic persons (HUFs, trusts, etc.) on or after May 13, 2005, and close them immediately.
Issue clear instructions to all designated branches operating the PPF Scheme to ensure strict compliance.
📜 Compliance
Identify all PPF accounts opened by juristic persons (HUFs, trusts, etc.) on or after May 13, 2005, and close them immediately.
Refund the deposit amount to the depositor without any interest for void accounts.
Allow existing accounts opened before May 13, 2005, to continue normally, but apply new rules for any extension requests.
Issue clear instructions to all designated branches operating the PPF Scheme to ensure strict compliance.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template
Example: if you are a Compliance officer at a bank this circular applies to (Banks operating PPF accounts (SBI, associate banks, and other listed public sector banks), Juristic persons (HUFs, trusts, provident funds) who opened PPF accounts on or after May 13, 2005, Individual PPF account holders with existing accounts), your first concrete step on “PPF Scheme 1968: Clarifications on Juristic Person Accounts” is: “Identify all PPF accounts opened by juristic persons (HUFs, trusts, etc.) on or after May 13, 2005, and close them immediately.” (RBI issued this 25 May 2005).
Circular: RBI/2004-05/480 -- PPF Scheme 1968: Clarifications on Juristic Person Accounts
Issued: 25 May 2005
Action required: Identify all PPF accounts opened by juristic persons (HUFs, trusts, etc.) on or after May 13, 2005, and close them immediately.
Action required: Refund the deposit amount to the depositor without any interest for void accounts.
Action required: Allow existing accounts opened before May 13, 2005, to continue normally, but apply new rules for any extension requests.
Action required: Issue clear instructions to all designated branches operating the PPF Scheme to ensure strict compliance.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
AI-drafted · 1-model AI consensus fact-check · under the editorial review of our expert review panel · decoded & published by BankPulse · 21 Jun 2026, 09:02 IST
Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=2290&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert review panel. Independent platform, not affiliated with the Reserve Bank of India; never reproduces RBI text verbatim.
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