NPS to spread reach via online accounts

Written by Surabhi Rastogi | Surabhi | New Delhi | Updated: Aug 26 2009, 05:32am hrs
You may soon be able to open an account with the New Pension Scheme online. With just 1,200 subscribers in the scheme, the Pension Fund Regulatory and Development Authority (PFRDA) is considering the proposal in an effort to expand its reach and base.

The option would be available on a banks website just like the one for Internet banking, a PFRDA official said. The proposal is expected to feature in a PFRDA meeting on Wednesday with the 21 points of presence for the scheme to discuss ways and measures to improve their performance and the reach of NPS.

Enabling online accounts would not only help citizens register for the NPS, it would also address the issue of limited number of PoP branches. It would also cut down on the resources that PoPs have to devote to the NPS, the official said.

Points of presence (PoPs) are the centres where citizens can register for an NPS account. However, since the scheme was launched (three months before), the interim regulator has received a number of complaints regarding the lack of cooperation from PoPs.

There have been numerous complaints that the PoP branch refers the investor to a different scheme or it has no knowledge about the NPS. We have realised that they are not geared up for the scheme and so are not receptive to queries, the official said.

Wednesdays meeting is a part of the performance monitoring strategy of the PFRDA. Data available with it reveals that of the 724 PoP branches across the country, which have managed to register only 1,200 subscribers. In fact eight of the 21 PoPs have not opened even a single NPS account.

These include Oriental bank of Commerce, Union bank of India and the Central Bank of India.

Meanwhile, the PFRDA is also looking at marketing strategies like radio jingles and information dissemination on the NPS through non government organisations to popularise the scheme.

As a last resort measure to pull up errant PoPs, it is also planning to cancel licenses if they fail to open any accounts or have too few accounts registered with them. This is surely an option we will exercise if the need be, she said.

Institutional investors to help finetune scheme

In anticipation of the enactment of the Pension Fund Regulatory and Development Authority (PFRDA) Bill in the Winter session of the Parliament, the interim regulator has called for institutional advisers to help finetune the working of the New Pension Scheme.

The PFRDA on Tuesday issued a Request for Proposal for an institutional adviser to help prepare regulations for both the New Pension Scheme for government employees and that for private citizens on operational issues like pension funds, investment of funds, NPS Trust, Subscriber Education and protection fund, etc.

The NPS architecture and the roll out of the NPS has been undertaken on the direction of the Centre through agreements with various intermediaries. Immediately after passage of the PFRDA Bill, necessary regulations are to be notified under the PFRDA Act.

For this purpose PFRDA intends to engage services of professional Institutional Advisers who could provide necessary technical inputs and assistance to PFRDA in framing of regulations, the document says.

The bidder, who will be selected by September 16, 2009, will be expected to frame all regulations within three months of signing the contract.