Rules for Providend Fund

Advance against member’s own contribution to Provident Fund

No advance shall be granted unless the Trustees are satisfied that member’s pecuniary circumstances justify the advance and it will be expended for the specified purpose.

Service Criteria

There is no service criteria but the Trustees may, at their absolute discretion and at the written request of member, make advance to member against his own contribution plus interest thereon standing to his credit in the fund, subject to the following conditions:-

Conditions Rule 15 (1) (a)

  • To pay expenses incurred in connection with the serious or prolonged illness of the member or any person actually dependent on him.
  • To pay obligatory expenses on a scale appropriate to the member’s status, which by customary usage the-member has to incur in connection with marriages, funerals or other ceremonies.
  • To meet any other expenditure or liability which, in the opinion of the Trustees, is extraordinary and beyond the ordinary opacity of the member to meet.

Amount of Advance

Rule 15 (1)(B)

An advance shall not, except for special reasons exceed three month’s basic pay or half the amount of the member’s own subscriptions and interest thereon standing to his credit in the fund whichever is less. For the purpose of advance basic pay means basic pay + other eligible allowances which are reckoned for provident fund contribution.


The under noted points should be verified while submitting the proposal for advance:-

  • Recommendation for advance as special case should be made by the Branch Manager and Dy. General Manager after satisfying that the pecuniary circumstances of the member so warrant.
  • Instead of total emoluments, basic pay and other eligible allowances should be written separately in the application.
  • Statement showing member’s own contribution with interest up to the month of submission of application should be submitted along with photocopy of latest Provident Fund Statement.
  • Details of advance and withdrawals taken by the employee should be clearly mentioned in the certificate.
  • Advance/Withdrawal will not be sanctioned before three months prior to the month of marriage of son/daughter of the employee.
  • Amount of advance recommended should be divisible by the number of instalments it is proposed to be paid. If necessary the amount of advance may be either raised or reduced to admit fixation of such instalments.
  • More than one advance can be sanctioned to a member but both should be for different purposes. In case a member desires to avail an advance for the purpose he has already availed, he will have to wait for a period of 12 months after the date on which he has repaid the earlier a’dvance with interest.


Rule 15 (2) (A)

The advance will be recovered in equal instalments of not less than 12 months unless the member so opts and not more than 24 months. Where the amount of advance exceeds 3 month’s basic pay plus eligible allowances, it shall be open to the Trustees to permit recovery in 36 equal monthly instalments. Interest is charged at the rate of 1/5% of total amount and recovered in one instalment after the last instalment is repaid if the advance is repayable in 12/24 months. If the advance is repayable in 36 instalments interest can be recovered in two equal monthly instalments immediately after repayment of the principal amount.

Recovery of the first instalment shall commence, when the member draws his salary for the full month for the first time after the advance is made. A member may, at his option, repay more than one instalment in one month

Thumb Rule

Px(N+-1) Here     P = Amount of advance
500    N = No of instalments


  • Interest calculation on the advance of Rs. 30,000.00 repayable in 24 instalments 30,000.00 X (24 + 1) / 500 = 30,000.00 X 25/ 500 = Rs. 1,500.00
  • Interest on advance of Rs. 22,000.00 refundable in 36 instalments. 22,000.00 X (36 + 1) I 500 = 22,000.00 X 37 I 500 = Rs. 1,628.00


As the advance against Provident Fund balance is not like other advances given by the Bank but it is an advance out of member’s own contribution with interest and repayable In specific number of monthly instalments, the interest will be payable on the remaining balance only. However, instalments recovered every month will be added to the member’s balance as shown in the calculation of interest on provident fund balance. After full repayment of loan amount, interest @ 115th percent is recovered in maximum two monthly instalments (as detailed above) and credited to the member’s balance. If more than one advance has been sanctioned to a member, each advance shall be treated separately for the purpose of recovery and should be reported separately in monthly contribution list.

Withdrawal aaginst member’s own contribution to P.F.

Rule 16. Service Criteria

No withdrawal shall be allowed for any of the purposes mentioned below except (e) unless the member has completed 25 years of service or has attained the age of 50 years.


  • Building or acquiring a suitable house for his residence including the cost of the site or repaying any outstanding amount on account of loan expressly taken for the purpose.
  • Meeting the cost of higher education, including wherever necessary the cost of passage, of any child of the member in the following cases, namely:-
    • For education outside India for an academic, technical, professional or vocational course beyond the High School stage, and
    • For any Medical, Engineering or other technical or specialised course in India beyond the High School stage, provided that the course of study is for not less than three years.
  • Meeting expenses in connection with the marriage of his / her daughter or daughters or, if the member has no daughter, any other female relatives, dependent on him.
  • Meeting expenses in connection with the marriage if his son or sons
  • Building or acquiring, as a member of Co-operative Housing. Society approved by the Bank or under any other scheme approved by the Bank for the purpose, a suitable house for his residence including the cost of the site. (Here age limit and or service criteria are not applicable).

Amount of Withdrawal

For the purpose of withdrawals salary means basic pay + other eligible allowances which are reckoned for provident fund contribution.

Withdrawal Under Rule16 (a) (Building or Acquiring a House)

  • Up to one half of the amount of his own subscriptions with interest thereon standing to his credit in the fund.
  • The actual cost of the house including the cost of site or the amount required for repayment of the loan taken for this purpose, whichever is less. To become eligible to avail a withdrawal under Rule 16(a) of the fund, the member will have to satisfy all the provisions of Rule 21(1) of the fund.

Rule 21(1)

No withdrawal shall be permitted for any purpose specified in clause (a) of the rule 16 unless the Trustees are satisfied:

  • That the member does not already own a house at the place of his duty or at the place where he intends to reside after retirement and that only one house will be buy, acquire, or redeemed by the member at such place;
  • That the sum, which he proposes to withdraw, is actually required for the purpose;
  • That such sum together with the private savings, if any, of the member would be sufficient for that purpose.
  • That in the case of withdrawal for the construction of house:
    • The member possesses or intends to acquire forthwith the right to build it on the site therefore.
    • The member has an approved plan.
  • That in the case of withdrawal for the acquisition of a house the vendor has an indefeasible and clear tittle to the land and house, which he agrees to sell to the member.
  • That in the case of withdrawal for the purpose of repayment of loan, the member has produced necessary deeds and papers before the Trustees proving his undisputed title to the land and the house thereon.