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I have an enquiry about the PPF system. If an Indian citizen, having a Public Provident Fund (PPF) account with an indian bank, plans to give up his/her Indian citizenship before the maturity period ends,

  • What happens to the dpeosited fund (and interest)?
  • Can the PPF amount be withdrawn completely before maturity (the account matures on completion of fifteen complete financial years from the end of the year in which the account was opened)?
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The answer is no. Only Indian citizens can operate a PPF account.

If you become an NRI while the PPF account is still operative and active, you can continue making contributions to it until the maturity period is reached. At this point, the account will have to be closed, and the proceeds will be deposited into your NRO account.

In case you renounce your Indian citizenship while the PPF account is still operative, the account has to be closed or deemed to have been closed from the end of the month prior to the month the one gives up his/her Indian citizenship. The deposited fund and any interest accrued shall be deposited into your NRO account.

Withdrawal from PPF upto 50% of the balance is allowed in the 6th financial year of the opening of the account. Premature closing of the account is allowed from the 5th year on proven educational and medical grounds.

See the following notification from the GoI: https://nsiindia.gov.in/InternalPage.aspx?Id_Pk=149

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  • The GoI's NSI notifications do not mention about the operating of account after individual becomes non-resident. The notification has the clauses mentioned only for the eligitbility to open an account.
    – Swatantra Kumar
    Commented Aug 17, 2023 at 8:48
  • @SwatantraKumar The fourth point, specifically, 4.4: "If a depositor in a single account, or any of the depositors in a joint account, or either the guardian or a minor depositor or a depositor who is a person of unsound mind, as the case may be, ceases to be a citizen of India, the account shall be closed or deemed to be closed from the last day of the month preceding the month in which the depositor ceases to be a citizen of India."
    – pseudomonas
    Commented Aug 21, 2023 at 11:06
  • Also, from personal experience, I can say with confidence that non-resident citizens of India can continue to operate their PPF accounts until the maturity period. Here is an article from DBS Bank: dbs.com/in/treasures/articles/nri-hub/live-enriched/…. If you still need confirmation, your best source of advice would be to ask your bank.
    – pseudomonas
    Commented Aug 21, 2023 at 11:13

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