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Module: General Practice

Q65: Scenario: Mr. Raj, an APY subscriber, fails to maintain the required balance in his savings account for the monthly contribution auto-debit. The contribution for April 2026 remains unpaid. What is the consequence of this default?

A
The account is immediately closed and the corpus is refunded.
B
The pension amount at maturity will be reduced proportionately.
C
He must pay the overdue amount along with a specific penalty ranging from ₹1 to ₹10 per month.
D
No penalty is charged if the payment is made within the next 6 months.
✅ Correct Answer: C
🎯 Quick Answer:
He must pay the arrears plus a penalty.
Concept Definition: Default Charges in APY.
Structural Breakdown: 1. Penalty Structure: Banks collect a penalty for delayed contributions based on the contribution amount: ₹1 per month for contribution up to ₹100. …up to ₹10 per month for contributions above ₹1,001.
2. Status: The account is not closed immediately; it is classified as a "default" account.
3. Dormancy Timeline: After 6 months: Account Frozen.
After 12 months: Account Deactivated.
After 24 months: Account Closed.
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