IVP stands for Indira Vikas Patra, and KVP stands for Kisan Vikas Patra. These are two distinct government savings schemes offered in India, designed to encourage investment among citizens.
Full Forms Explained
Both Indira Vikas Patra (IVP) and Kisan Vikas Patra (KVP) were initiatives by the Indian government to provide secure investment options. While KVP remains an active scheme, IVP has since been discontinued.
| Acronym | Full Form | Status | Primary Purpose |
|---|---|---|---|
| IVP | Indira Vikas Patra | Discontinued | Short-term savings, initially aimed at rural investors |
| KVP | Kisan Vikas Patra | Active | Long-term savings, doubling investment over a period |
Kisan Vikas Patra (KVP)
Kisan Vikas Patra (KVP) is a popular small savings scheme managed by India Post. It is designed to allow individuals to double their invested money over a specified maturity period. KVP certificates are considered a safe investment option as they are backed by the Government of India, offering a guaranteed return.
Key features of KVP include:
- Investment Objective: To double the principal amount invested within a fixed maturity period, which is currently 124 months (10 years and 4 months) as of Q2 FY 2024-25.
- Purchase Channels: Available for purchase at all post offices and designated public sector banks across India.
- Flexible Denominations: Certificates can be purchased in various denominations, starting from as low as ₹1,000.
- Liquidity: While primarily a long-term investment, KVP offers provisions for premature encashment after a certain lock-in period, albeit with some penalties.
- Collateral Value: KVP certificates are widely accepted by financial institutions as collateral for securing loans, making them a valuable asset for accessing credit.
For more detailed information on KVP, you can refer to official sources like the India Post website.
Indira Vikas Patra (IVP)
Indira Vikas Patra (IVP) was a similar small savings instrument that was introduced in 1986. It was created with objectives akin to KVP, primarily to mobilize small savings from the public, especially those in rural areas, to support national development initiatives. However, the IVP scheme was discontinued in 1997.
Historical aspects of IVP include:
- Introduction: Launched by the Government of India in 1986.
- Discontinuation: The scheme was withdrawn in 1997, primarily due to concerns related to potential misuse for money laundering and a broader restructuring of government savings policies.
- Features (Historical): Similar to KVP, IVP offered a specific maturity period for doubling the investment and was available in different denominations to cater to a wide range of investors.
- Legacy: Despite its discontinuation, existing IVP certificates remained valid until their maturity dates and, like other government securities, could be utilized as collateral for loans.
Relevance in Government Securities Loans
Both KVP and, historically, IVP fall under the umbrella of government securities and have served as effective instruments for securing loans. Financial institutions, including various banks, frequently accept these certificates as collateral, providing a straightforward mechanism for individuals to obtain credit against their accumulated savings.
- Collateral for Credit: KVP certificates are a recognized form of collateral that banks accept for various types of loans, such as personal loans, business loans, or even against property. This allows investors to unlock the value of their savings without having to prematurely liquidate them.
- Security for Lenders: Because these instruments are backed by the Government of India, they present a high degree of security to lenders, which can translate into more favorable loan terms for borrowers.
- Access to Capital: Utilizing KVP as collateral can enable individuals and small businesses to access necessary funds at potentially lower interest rates compared to unsecured loans, as the inherent risk for the lender is significantly mitigated.
This dual utility underscores how government-backed savings instruments contribute not only to individual financial growth but also play a role in facilitating access to credit within the broader economy.
