Definition : Pay roll Savings Scheme is an arrangement under which an employee voluntarily authorized the employer to deduct from his salary every month a fixed amount for deposit in various savings schemes of the Post Office. It was introduced in 1958 in private section undertakings and extended to Government offices in May, 1962. The amended section of the Wages Act permits the employers to deduct the agreed amount from the wages/salaries of the employees and invest the same in the National Savings Securities as desired by them under this Scheme.

Object : The Pay Roll Savings Scheme brings in small savings and forms an ideal source of mopping up small savings from the salaried persons. The arrangement of Pay Roll Savings breaks down the human resistance to save and makes saving easy, smooth and automatic for the employees. The savings becomes the first charge on their income. The whole idea of the scheme is that the depositors (employees) will not have to run to the Post Office and stand in the queue but on the basis of their authorisation the amount consented will be regularly deducted from their monthly pay bills and deposited by the cashier of the office in their respective pass books or invested in savings certificates as the case may be. The scheme also helps employer because a thrifty, stable and contended staff is conducive to the efficient working of the establishment.

Scope: The scheme at present is applicable to deposits/investments in the P.O.CTD/RD accounts, 2/3/5/- year Time Deposit accounts. PPF Accounts, and N.S.Cs (VIII-Issue).

Procedure in drawing offices: (i) Pay Roll Savings groups are formed in offices, mills, factories, etc. From each member of the staff in the group, a letter of consent in Form at Annexure I, agreeing to deduction of a stated amount being made from his pay regularly for deposit in PPF/CTD/RD/TD account or investment in Savings Certificates, is taken.
(ii) The employer will deduct each month at the time of disbursement of pay to the employees the amount to be deposited/invested in the National Savings Securities as desired by the employees.
(iii) In Government offices the deductions so made shall not be entered in the pay bills but will only be shown against each name in the separate column to be opened in the Acquittance Rolls or in the office copy of the pay bills according as the acquittance of the pay is obtained on separate Acquittance Rolls or on office copy of the pay bills. In the case of government undertakings, statutory bodies and private establishments deductions will be made in the salary bills of he employees like other bill deductions.
(iv)The amounts collected should be deposited in the deposit accepting office (Post Office) at least within five days after collection. Pending remittance, the amounts collected should be kept in the cash chest of the office in government offices.
(v) The total collection under the Pay Roll Savings Scheme should be entered in cash book as a receipt and its remittance to the deposit accepting office (Post Office) shown as disbursement.
Note : In the case of Public Works, Forest and other Departments, officers who have been authorized to withdraw on cheques and remit in lump sum the entries regarding the amount collected towards the P.R.S.S. and the remittance to the deposit accepting office will not be entered in the main cash book as it will imply routing them through government account but in a subsidiary cash book.
(vi)Heads of offices should check these entries at least once a month.
(vii) The amount deducted from the salary of the employees will be remitted to the Post Office in cash or by cheque drawn on the Postmaster by the cashier or some other official nominated for this purpose. The account opening application forms of the employees in case of new accounts, pass books for existing accounts and applications for the purchase of savings certificates, etc. along with deduction schedules and single pay-in-slip (SB-103) for the whole amount will also be sent to the Post Office. The deduction schedule will be prepared in duplicate for the purchase of savings certificates in form at Annexure II and in triplicate for deposit in CTD/RD/TD/PPF accounts in form at Annexure III. The schedule the names of the employees should be arranged in serial order of account number of pass books. A separate schedule will be prepared for each type of account or certificate.
(viii) The Postmaster will issue separate pass books for all the new accounts and return the existing pass books after making the entry of deposit in them. The savings certificates will also be issued separately for each member. The pass books will remain in the custody of the cashier/head of the office for subsequent deposits. The account numbers will be intimated to the employees.
(ix) When the pass books are received back from the Post Office with deposits duly entered therein, the cashier will briefly that the entries have been made in accordance with the schedule. Similarly after savings certificates are issued the cashier will deliver them to the employees concerned and obtain their receipt on the copy of the schedule
(x) The Pass books and the deduction schedules certified by the Post Office should be readily available for verification/inspection by the depositors..
(xi) In the following months, pass books and a single pay-in-slip for the whole amount will be sent to the Post Office alongwith deduction schedules in triplicate) and cash/cheque. For new members applications for opening of new accounts will be sent.
(xii) The Postmaster will return one copy of the deduction schedule stamped and receipted. If the deposits are made in cash, the pass books duly completed will be returned on the same day or on the next working day. If the deposits are made by cheque, a receipt in the counter foil of pay-in-slip will be issued by the post office for the cheque. When the cheque is encashed, the copy of the schedule duly stamped and receipted along with the pass books will be returned when the transactions are accounted for in the books of the Post Office. For this purpose the employer’s representative will have to call at the post Office again to collect the pass books and the copy of the schedule. The date of accounting the amount in the pass books will be the date of presentation of the cheque in the case of CTD/RD accounts and not the date of encashment of the cheque.
(xiii) The scheme is applicable to all the staff of the office both gazetted and non-gazetted.

Master Schedule System: The procedure described above relates to the monthly Schedule System. Under this system the employer has to furnish deduction schedules every month afresh duly corrected in respect of all the depositors to the Post Office. There is another system which is called”Master Schedule System” which may be adopted for CTD/RD accounts in offices, undertakings, etc. where the members of savings group are 25 or more. This system has been introduced to reduce the clerical work in the disbursing offices. Under this system the employer has to submit a Master Schedule containing the account numbers and other particulars of all the employees covered under the scheme only once when the scheme is started in the office. In subsequent months, only changes due to transfers, retirements, new members, etc. are to be intimated to the Post Office in the form of plus and minus statement (Annexure IV).These changes are incorporated in the Master Schedule kept by the employer and at the Post Office in order to make it up-to-date. A fresh Master Schedule is submitted every year incorporating all the changes to the Post Office. If any office finds this system more convenient it can adopt it provided a great care is taken in intimating the plus and minus statement cent per cent accurate to the Post Office in subsequent months to enable the Post Office to maintain the accounts correctly.

Commission payable to Cashier/Disbursing Officer (1) The cashier or other disbursing officer will be remunerated by a commission for undertaking the work of effecting recoveries and thereafter depositing them in the Post Office. No commission is payable on investments secured through this scheme for deposits in the Post Office Savings accounts and 1-Year Time Deposit accounts.
(2) The Ministry of Finance (DEA) have decided that no commission will be payable to pay roll savings group leaders on amounts re-deposited in Time Deposit accounts under Rule 6 of P.O. Time Deposit Rules, 1981.
(3) The rates of commission fixed from 1.5.1981 onwards by the Government for this Scheme is Rs 2.5 percent.
(4) The Cashier/Disbursing officer will submit this claim of commission every month to his drawing and disbursing officer. Such claims should be supported by a copy of the deduction schedule returned by the Postmaster duly signed and stamped.
Clarification: Under the Pay Roll Savings Scheme, Cashiers/Disbursing Officers are to be Group leaders to collect and deposit the money. Recently a case came to notice, in which an official other than the Cashier/Disbursing officer was entrusted with PRSS work. Whether is could be allowed, was considered within the frame of the PRSS rules and in consultation with the Department of Economic Affairs, Ministry of Finance. While under the letter of the rules it is not permissible now, the need for a relaxation to suit exceptional contingencies is realized. It has therefore been decided with the concurrence of the Department of Economic Affairs that as a matter of course, Cashier/Disbursing Officer of the office should b e the PRSS group leader, but where the cashier/Disbursing Officer is unwilling to undertake the work, some other official may be chosen as group leader, but desirably some one in an allied position like the Accountant, for example.

Procedure for drawal and disbursement of commission; (a) The following procedure will be followed for drawal and disbursement of the commission by the Drawing and Disbursing Officers of the Ministries and Departments and attached and subordinate offices of the Government of India after the Departmentalisation of accounts w.e.f. 1st October, 1976, vide Ministry of Finance (DEA) letter No.F.1(13)-NS/76 dated 17-11-1976 and further amended vide Ministry of Finance (DEA) letter No. F.2(118)-3(R&A)79 dated 21.8.1979.
(i) On receipt of the claim for the commission from the Cashier/Disbursing officer the Drawing and Disbursing Officer will scrutinize properly the claim with reference to the deductions schedule. If the claim is found to be in order the Drawing and Disbursing Officers will prepare bills for the commission to be paid to the cashiers based on the duplicate copies of all the proforma duly completed in all respects and submit the bills to the Pay and Accounts Officer concerned for payment. The Drawing and Disbursing Officers will furnish a certificate on the bills that all the certificates shown in the various proforma have been received by the Cashier and made over to the employees concerned.
(ii) The Pay & Accounts Officers will scrutinize the bills to see that the commission claimed is in accordance with the approved rates of commission for the various types of investment and that the certificates referred to at (i)_ are furnished on the bills by the Drawing and disbursing Officers. If the bills are found to be in order, payment will be made by the Pay and Accounts Officers by cheque in favour of the Drawing and Disbursing Officers. The expenditure though provided for in the budget of the Ministry of Finance, Departt. Of Economic Affairs for adjustment but will be accounted for by the Pay & Accounts Officers of the various Ministries and the Departments of the Government of India under the final head 2049- interest Payments –A-3 Interest on Small Savings provident Fund, etc. A-3(1)(3)(2)-Expenditure in connection with Small Savings Schemes”. Which is administered by the Department of Economic Affairs (Budget Divison) Ministry of Finance.
(iii) The Drawings and Disbursing Officers will furnish a certificate to the Pay & Accounts Officers each month that the amounts of commission drawn have been disbursed to the Cashiers concerned. The acquittance from the Cashier should be obtained separately and filed by the Drawing & Disbursing Officers if the payments involved are for payment of amounts up of Rs 100/- vouchers/acquittances for over Rs 100/- should be sent by the Disbursing Officers to the Pay & Accounts Officers concerned alongwith the certificate of disbursement referred to earlier.
(iv) The Principal Accounts Officers of the various Ministries/Departments will send a monthly statement of expenditure on payment of commission booked under the head of account mentioned at (ii) above to the Principal Accounts Officer, Department of Economic Affairs for purposes of Control over expenditure against the budget provision made therefore and for preparation of appropriation accounts.
(b) The procedure to be followed for the payment of commission to the Cashier under the Drawing and Disbursing Officer of the various offices under the State Governments has been prescribed as under by the Ministry of Finance (DEA) vide letter No.F-I(13)-NS/76 dated 7-1-1977.
(i) It has been decided that even after departmentalization of accounts in the Department of Economic Affairs, the Drawing and Disbursing Officers of State Governments will continue to present their bills for payment of commission under the Pay Roll Savings Scheme at their respective Treasury Officers. These bills should specifically indicate that they are to be finally accounted by Controller of Accounts, Department of economic Affairs, new Delhi, under the head of account “2049- Interest Payments-A-3(1)(3)(2)-Expenses in connection with the Small Savings Schemes”
(ii) The payments made by the Treasuries will be taken against Governments balances initially and accounted under appropriate suspense heads. The State Accountant General will take action to get re-imbursement from the Controller of accounts, Department of Economic Affairs, who will record this expenditure under final heads in his accounts.
© In the case of Defence Establishments, Government Undertakings, Educational Institutions (other that Govt. Schools) and Private sector establishments, employers will send the claim of the commission alongwith the copy of the deduction schedule duly receipted and stamped by the postmaster to the Regional Director, National Savings of the State concerned who will draw the amount of the commission and remit to the Cashier/Disbursing Officer/Employer as the case may be.
In the case of Defence Esatablishments the scheme is applicable only to industrial and non-industrial civilians paid from the Defence Estimates.
8. Procedure in P & T Department : Not reflect here
9. Pay Roll Savings Scheme in Railway Establishments : Not reflect here
10. Introduction of Pay Roll Savings Scheme in the Defence Units served through field Post Officers- not reflect here
11. Pay Roll Savings Scheme in Public and Private Undertakings-Revised procedure to be followed by Post Offices :-
(1) Employers in Public and Private Sector Undertakings or their representatives claim commission/working expenses from National Savings organization by submitting claims dully supported by copies of the deduction schedules duly date stamped and certified by the Post office
.(2) It has been decided that with effect from 1st May 1978 employers in Public and private Sector Undertakings and their authorized representatives will present amount to be invested at the post office alongwith the deduction schedule as at present and in addition with their claims (bill) for commission/working expenses, Part II (copy enclosed) of the claim form, a proforma of a certificate to be furnished by the Post Office in respect of amounts deposited for investment.

(3) After accepting amounts presented by an employer or his authorized representative the Postmaster/Sub Postmaster may also complete the certificate part on the claim for commission/working expenses and return the claim form with the copies of the deduction schedule to the employer or his representative. The amounts shown in the certificate as deposited for investment in RD and CTD accounts should not include the following amounts.:-
(i) Amount representing penal interest for late deposit of amounts in these accounts.
(ii) Amount deposited as repayment of amounts of withdrawal and interest payable thereon.
(4) In the case of amounts paid by employer/their representatives by cheque the certificate should be issued after the cheque is cleared and intimation of clearance is received by the post Office.
 

PART II (Certificate of the Post Office)

Securities Amount   Certified that an amount of Rs ……….(in words

R.D.                                   Rs………only) as specified in the margin, has

C.T.D.                               been receipted by this office on……..      in

2-Year Td                          respect of the Pay Roll Savings Group particular-

3-Year TD                         ised in Part I for crediting into the accounts and

5-Year TD                         for investment in the Securities as per details in

N.S.C.                               the respective schedules. This amount does not

P.P.P.                                include the penal interest for the deposits in RD/

Total                                  CTD accounts and amount deposited as repay-

                                          ment of amounts of withdrawal and Interest pay-

                                          able thereon.

12. Pre-audit of claims of commission: The Government of India, Ministry of Finance (DEA) vide their letter No. F.31(19)-NS/65 dated 19-11-1965 have in consultation with the C & A.C. decided to exempt the claims of commission over one year arising under the Pay Roll Savings Scheme from being pre-audited under the provision of clause (d) to rule 136 of Central Treasury Rules, Volume I.
13. Disposal of old records: It has been decided that the stock of P.R.S.G. paid claims should be retained for a period of five years from the date of audit of these claims.

Director General’s Instruction
(i) This is regarding non-observance of the provisions of Pay Roll Savings Scheme by the Organisations.
(ii) Of late, it is being observed that the organizations availing of the facility provided under Pay Roll Savings Scheme are not paying adequate attention towards operation of the scheme. Group leaders of the groups formed for the operation of PRSS in the Organisations are required to deposit the amount so collected alongwith the schedules at least within five days after collection under Rule 4(IV) of Pay Roll Savings Scheme. Further, Pass Books are required to be presented once in six months for entry of deposits during the preceding six months and the Postmasters may fix the months for each Organisation /Employer so that work is not accumulated in one month. But the Organisations do not stick to their schedules of presenting pass books and also the amount so collected is deposited with much delay i.e.towards the end of the month. This results into the following grave situations:-
(i) Remitting the last monthly instalment very late results in an unnecessary harassment to the holders for not getting the maturity amount on the due date of maturity.
(ii) The benefit of full maturity value under Protected Savings Scheme is available subject to fulfillment of certain conditions, one of which is that the first twenty four monthly deposits are made without default. Where death of a depositor occurs between the date of recovery of 24th instalment and the date of deposit in the concerned Post Office, a great hardship may be caused to the legal heirs as well as to the Post Office Staff because relaxation of M/O Finance is required to be sought in such cases before making payment of full maturity value. The depositing of recovered amount as early as possible by the Group Leader is therefore very essential.
(iii) Because of the Organisations not adhering to their time schedules, the work on account of PRSS accumulates in Post Offices towards the end of every month. This mounts tension on the Post Office Staff and consequently results in committance of mistakes in the work of ledger posting etc. which ultimately hampers the Ledger Agreement work in Post Offices.
(3) It is requested that adequate steps may be taken to suitably advise the Group Leaders and Organisation and their performance may also be watched. Imposing of some penalty on the Group Leaders in the form of deduction of some amount from the commission earned by them may also kindly be considered if their work is not satisfactory.