Banking and Insurance - Laws and Practice · Various Government Schemes

Other Government Schemes and Initiatives in Banking

Updated 11 October 2026 · Fact-checked

These are government schemes that run through banks beyond Jan Dhan and credit schemes: Sukanya Samriddhi (girl child savings), Sovereign Gold Bond (gold-linked government security), Digital India (digital payments and services) and DBT (subsidies paid straight into bank accounts). For each, learn the objective, who is eligible, key features, the bank's role and tax treatment.

Understand Other Government Schemes and Initiatives

Banks in India do more than take deposits and give loans. The Government uses them as channels to deliver savings products, investment products and welfare payments. This topic groups the schemes that do not fit under Jan Dhan, social security or credit-linked schemes.

Sukanya Samriddhi Account (SSA) is a small-savings scheme for the girl child, run under the Sukanya Samriddhi Account Rules, 2014. A parent or legal guardian opens it in the girl's name at a post office or an authorised bank. The aim is to build a fund for her education and marriage. The interest rate is notified by the Government, not set by the bank.

Sovereign Gold Bond (SGB) is a Government of India security denominated in grams of gold. The Reserve Bank of India issues it on behalf of the Government. You pay in rupees, earn fixed interest, and get the gold-linked value on redemption. It lets savers hold gold without physical storage, and its objective is to reduce the demand for physical gold. Fresh SGB tranches have not been issued since 2024-25, so the scheme is not open for new subscription. Bonds already issued remain outstanding until redemption, and their interest and redemption terms continue as originally notified.

Digital India is the Government's programme to make services available electronically and to build digital infrastructure. For banking, its importance is digital payments such as UPI, internet and mobile banking, and online delivery of services. Direct Benefit Transfer (DBT) sends subsidies and benefits straight into the beneficiary's bank account. It works on the JAM trinity: Jan Dhan account, Aadhaar and Mobile number. The account holds the money, Aadhaar identifies the person, and the mobile number gives access and alerts. DBT cuts leakage, duplicate beneficiaries and delay.

In the exam, treat each scheme as a short profile: objective, eligibility, key terms, role of banks and tax or regulatory angle. Then link it to financial inclusion.

Key rules to remember

SSA eligibility: Girl child below 10 years at opening; one account per girl; generally two accounts per family; Twins or triplets at the first birth can be an exception to the two-account limit. Opened by parent or legal guardian.
SSA deposits: Minimum ₹250 and maximum ₹1,50,000 in a financial year; deposits for 15 years from opening; These are the limits as currently notified. Check them in your study material before the exam, as the Government can revise them.
SSA maturity and withdrawal: Matures 21 years from opening; partial withdrawal of up to 50% of the balance at the end of the preceding financial year, after the girl attains 18 years or passes Class 10, whichever is earlier, for higher education expenses; the account can be closed on marriage only if the girl is 18 or older at the time of marriage; No deposits after 15 years, but interest continues until maturity. Marriage is a ground for closing the account (only if the girl is 18 or older at marriage), not for the 50% partial withdrawal.
SGB basic terms: Unit = 1 gram of gold; tenor 8 years; early exit allowed after the 5th year on interest payment dates; interest 2.50% a year on the initial investment, paid half-yearly; Interest is fixed on the issue price in rupees, not on the current gold value.
SGB redemption value: Redemption price = simple average of closing price of 999-purity gold of the previous 3 business days before the redemption date, as published by IBJA; The issue price was based on the simple average of 999-gold closing prices of the last three business days of the week preceding the subscription period, while redemption uses the previous three business days before redemption. The subscription limit was 4 kg per individual and per HUF, and 20 kg per trust, in a financial year.
SGB tax treatment: Interest: taxable. Capital gain on redemption at maturity by an individual: exempt. Gain on sale or transfer before maturity: taxable as capital gain; Confirm the current rule under the Income-tax Act, 2025 in your study material.
JAM trinity: JAM = Jan Dhan account + Aadhaar + Mobile number; DBT was launched on 1 January 2013. Digital India was launched on 1 July 2015.

How to solve Other Government Schemes and Initiatives questions

Use one structure for any question on a government scheme, whether it asks for features, a comparison or a short case.

1Name the scheme and state its objective in one line.
2State who is eligible and who runs or issues it (Government, RBI, banks, post offices).
3List the key features: amount limits, tenor, interest or returns, withdrawal or exit rules.
4Explain the role of banks: opening accounts, collecting money, paying benefits, enabling digital channels.
5State the tax or regulatory treatment where the scheme has one.
6Apply the rules to the facts given. Check age, amount, years and dates one by one, and compute any figure.
7Conclude with the link to financial inclusion or savings mobilisation, and state your answer clearly.

Quickest way: Four-line scheme profile

When to use it: Use it for short-note questions and for list or compare questions when time is short.

Line 1: what it is and who launched or issues it.
Line 2: eligibility and limits (age, amount, tenor).
Line 3: returns and tax in one sentence.
Line 4: the bank's role and the inclusion goal.
For DBT, write JAM and the three roles of the components. Adding this earns marks quickly.

Common mistakes in Other Government Schemes and Initiatives

Saying the Sukanya account can be opened for a girl of any age under 18.
Students mix up the opening age with the age at withdrawal.
Fix: Remember: opening below 10 years, withdrawal eligibility from 18 or Class 10, maturity after 21 years.
Saying deposits continue for 21 years in SSA.
The deposit period and maturity period are confused.
Fix: Deposits run for 15 years. The account matures at 21 years. The balance earns interest in the last 6 years. Closure before maturity on marriage is allowed only if the girl is 18 or older at the time of marriage.
Saying SGB interest is paid on the current gold value.
Students assume everything in an SGB moves with the gold price.
Fix: Only the redemption value is linked to gold. Interest of 2.50% is on the initial rupee investment.
Treating all SGB income as tax-free.
Students remember the capital gain exemption and forget the interest.
Fix: Interest is taxable. The exemption is for capital gain on redemption at maturity by an individual. Sale before maturity can attract capital gains tax.
Describing DBT as just a subsidy scheme and leaving out JAM.
Students stop at the meaning and skip the banking mechanism.
Fix: Always explain how Jan Dhan, Aadhaar and Mobile work together, and the benefits: less leakage, no duplicates, faster payment.
Quoting a fixed interest rate for Sukanya Samriddhi.
Students memorise the rate from one quarter.
Fix: Write that the Government notifies the rate periodically. Quote a figure only if the question gives it.

Worked examples

Example 1

Meera opens a Sukanya Samriddhi account for her daughter Anika, aged 4, on 1 April 2027. State (a) the last year in which deposits can be made, (b) the date of maturity, (c) Anika's age at maturity, and (d) the largest total of deposits possible over the period if she deposits the annual limit of ₹1,50,000 (as currently notified) every year.

Show the solution

Deposits are allowed for 15 years from the date of opening.
The 15-year period runs from 1 April 2027 to 31 March 2042, so the last deposits fall in the financial year 2041-42.
Maturity is 21 years from opening: 1 April 2027 + 21 years = 1 April 2048.
Anika's age at maturity = 4 + 21 = 25 years.
Maximum deposits: ₹1,50,000 × 15 years = ₹22,50,000. This is the maximum of deposits only, and it excludes interest. It also assumes the ₹1,50,000 limit stays as currently notified.

Answer: (a) Deposits are allowed up to the financial year 2041-42 (15 years from opening). (b) The account matures on 1 April 2048. (c) Anika will be 25 at maturity. (d) The maximum total of deposits is ₹22,50,000 at the currently notified limit of ₹1,50,000 a year. Interest at the rate the Government notifies is extra.

Example 2

Rohan, an individual, holds 10 grams of Sovereign Gold Bond that he subscribed to in an earlier tranche at an issue price of ₹6,000 per gram. This is an illustrative example, since the scheme is now closed to new subscription. He holds the bonds to maturity. At redemption, the price is ₹8,000 per gram. Compute the annual interest, each half-yearly instalment, the redemption amount and the gain, and state the tax treatment.

Show the solution

Initial investment = 10 × ₹6,000 = ₹60,000.
Annual interest at 2.50% = ₹60,000 × 2.5 ÷ 100 = ₹1,500. The interest is on the initial investment, and the last half-yearly instalment is paid along with the redemption amount at maturity.
Half-yearly instalment = ₹1,500 ÷ 2 = ₹750.
Redemption amount = 10 × ₹8,000 = ₹80,000.
Gain = ₹80,000 − ₹60,000 = ₹20,000.
Tax: the interest of ₹1,500 a year is taxable in Rohan's hands. The capital gain of ₹20,000 on redemption at maturity is exempt for an individual.

Answer: Interest is ₹1,500 a year (₹750 every half-year) and is taxable. Redemption amount is ₹80,000, giving a gain of ₹20,000 that is exempt on redemption at maturity for an individual. Confirm the rule in your current study material.

Exam tips

Expect short notes: 'features of Sukanya Samriddhi', 'Sovereign Gold Bond' and 'role of JAM in DBT'. Prepare a four-line profile for each.
Write numbers exactly: below 10 years, 15 years of deposits, 21 years to maturity, 2.50% interest, 8-year tenor, exit after year 5. Examiners look for these.
For case questions, check each fact against the rule one by one and state the conclusion in the last line.
Link every scheme to financial inclusion or savings mobilisation, and name the bank's role. This turns a list into an analysis.
If a rate, limit or tax rule may have changed, say it is as notified by the Government or the Finance Act in force.

Practice questions from Various Government Schemes

Other Government Schemes and Initiatives: frequently asked questions

What are the main features of Sukanya Samriddhi Yojana for CS Professional?

It is a girl child savings scheme opened by a parent or guardian for a girl below 10 years. Deposits run for 15 years and the account matures at 21 years. Partial withdrawal of up to 50% of the previous year-end balance is allowed after the girl attains 18 years or passes Class 10, whichever is earlier, for higher education. The account can be closed on marriage only if the girl is 18 or older at marriage, and the interest rate is notified by the Government.

How is a Sovereign Gold Bond taxed?

The 2.50% annual interest is taxable. For an individual, the capital gain on redemption at maturity is exempt. A gain on sale before maturity is taxed as a capital gain. Check the Income-tax Act in force for the exact rule.

What is the JAM trinity and what is its role in DBT?

JAM stands for Jan Dhan account, Aadhaar and Mobile number. The Jan Dhan account receives the money, Aadhaar identifies the beneficiary and the mobile number gives access and alerts. Together they let the Government pay benefits directly and reduce leakage.

Which government schemes should I list for the banking sector in the CS exam?

Besides Jan Dhan, social security schemes and credit-linked schemes, list Sukanya Samriddhi, Sovereign Gold Bond, Digital India and DBT. For each give the objective, key features and the role of banks.