The Centre has approved a pilot scheme under which monthly income certificates of investors in various post-office savings schemes will be directly credited to their bank accounts.

The government is also likely to allow investors in small savings schemes like the National Savings Scheme to get their certificates dematerialised.

Once implemented across the country, the proposal to credit the accounts of small investors will end the indefinite wait at post-offices. The proposal was mooted by the department of posts and has been approved by the finance ministry.

Dematerialising the savings certificates of small investors will enable them to transfer the papers easily or sell them, besides eliminating the possibility of theft. For instance, in the case of Kisan Vikas Patras, loss of the certificate makes it almost impossible to retrieve the deposit.

In the absence of any substantial growth in investments in the capital market, it is the small savings schemes run by the Centre and now the state governments that have been on an upward swing. The total deposits under the post-office savings account on March 31 was Rs 11,593.73 crore (Rs 115.94 billion).

The Budget for 2003-04 estimated that accrual on account of small savings, including savings deposits, savings certificates and public provident fund, would be about Rs 60,000 crore (Rs 600 billion).

The number of small investors has also risen fast and according to some estimates now accounts for more than 60 per cent of the public dealings of post-offices.

The pilot scheme to transfer the monthly income certificates of investors to their bank accounts will be inaugurated in Mumbai by Communications Minister Arun Shourie.

In the next phase, the government is expected to take up the dematerialisation of savings certificates like NSS and then extend them to other schemes.

National Securities Depository Ltd, which is also working on setting up the ambitious Tax Information Network for the income-tax department, will possibly get the mandate for setting up the demat account for millions of post-office investors.

NSDL is also the back office for the funded pension system coming up for new government servants after the Cabinet approves it.