(1) An Account may be pledged or transferred as security, on an application made by the depositor in Form-5 supported with acceptance letter from the pledgee.
(2) Transfer of an account under this paragraph may be made to-
(a) the President of India or the Governor of a State in his official capacity;
(b) the Reserve Bank of India or a Scheduled Bank or a Cooperative Society, including a Co-operative Bank;
(c) a public or private corporation or a Government company;
(d) a local authority; or
(e) a housing finance company approved by the National Housing Bank and notified by the Central Government:
Provided that the transfer of an account opened on behalf of a minor or a person of unsound mind shall not be permitted under this paragraph unless the guardian of the minor or the person of unsound mind, as the case may be, certifies in writing that the minor or the person of unsound mind, as the case may be, is alive and that the transfer is for the benefit of the minor or the person of unsound mind.
(3) When any account is transferred as security under sub-paragraph (1), the authorised officer shall make the following endorsement in the record of the Account, including the Savings Certificate, namely:- “Transferred as security to …..” .
(4) Except as otherwise provided in this scheme, the transferee of an account under this paragraph shall, until it is re-transferred back under sub-paragraph (5), be deemed to be the depositor.
(5) An account transferred under this paragraph may, on written authority of the transferee, be transferred back with the previous sanction in writing of the authorised officer and when any such retransfer is made, the authorised officer of the accounts office shall make the following endorsement in the record of the account, including Certificate, namely:- “transferred back to……”.
(6) A blind or a person with physical infirmity making him incapable of operating the account may pledge his deposit through any literate individual whom he authorises for this purpose.