After allowing digital on-boarding, servicing, contributions and video customer identification process, now the pension fund regulator has permitted paperless exit
The regulator has taken a lot of digital initiatives for on-boarding, contributions and servicing.
In order to make the exit process from the National Pension System (NPS) easy, the Pension Fund Regulatory and Development Authority of India (PFRDA) has now enabled the online mode. Subscribers can initiate the exit request in the Central Record Keeping Agency (CRA) system using login credentials and provide the relevant details of exit: corpus allocation for lump sum and annuity, Annuity Service Provider (ASP) and annuity scheme and upload the withdrawal documents including KYC. The online submission will be further authenticated through either OTP or e-sign to make the process seamless.
Paperless exit At present, to exit from NPS subscribers have to physically approach their Points of Presence (POPs) to complete their withdrawal request process and the task is performed offline. The subscribers are required to submit the NPS withdrawal forms along with the other supporting documents for authorisation by the PoP.
The PoP will identify the bank account number of the subscriber by ‘Instant Bank Account Verification’ through penny drop and also verify the uploaded documents. For successful processing of online/offline withdrawal request of NPS subscribers, subscribers will have to pay PoPs a fee of 0.125% of the corpus with a minimum amount of Rs 125 and maximum of Rs 500.
A subscriber will have to initiate online the exit request by logging on to the CRA system using his credentials. At the time of initiation of request, messages about e-Sign/OTP authentication, authorisation of request by PoP will be displayed. The subscriber will then have to earmark the corpus for lump sum/ annuity, nomination details, etc., as per regulations. The subscriber will have to mandatory upload the scanned images of the relevant withdrawal documents along with the KYC. Once these are done, the subscriber will authenticate the request through OTP which will be sent to the subscriber’s registered mobile number and registered e-mail Id. However, if these details are incomplete or incorrect, then the subscriber will have to update the mobile number and email ID through the associated PoP /login before initiating the request.
After successful submission of an online exit request by the subscriber, the exit request along with scanned documents will be with the associated PoP in their CRA login. The PoP will then verify the bank account and match the beneficiary details. On authorisation of request by the PoP, the request for exit will get executed in the CRA system. Also, the uploaded withdrawal and KYC documents will be made available to ASPs online for processing annuity. The regulator has advised CRAs and PoPs to develop the required technical functionalities in a time bound manner for the benefit of the subscribers.
Digital initiatives The regulator has taken a lot of digital initiatives for on-boarding, contributions and servicing. In order to make onboarding to the National Pension System (NPS) simple, faster and cost-effective, the Pension Fund Regulatory and Development Authority (PFRDA) has allowed registered intermediaries to use Video-based Customer Identification Process (VCIP). The subscriber’s verification can be done without the physical presence before the PoP. The VCIP will not only help in expanding the reach of NPS as the account opening will be paperless, it will also help in speedy account closure and any service request related to NPS.
The pension regulator had introduced OTP-based authentication for paperless onboarding in June 2019. Customers of bank-PoPs who open a NPS account through internet banking of the respective banks can authenticate using OTP via registered mobile number or by e-signature. The regulator has also introduced Aadhaar-based offline paperless KYC verification process for NPS onboarding.
It launched D-Remit (Direct Remittance) for voluntary contribution through net banking by creating a Static Virtual ID linked to their permanent retirement account number (PRAN). Subscribers get the same day NAV if the contribution is made through this mode before 8.30 AM on any bank working day. The minimum amount contributed through D-Remit is `500 for both Tier I and Tier II accounts. A subscriber can set up systematic investment through auto debit instructions in net banking by which periodical and regular contributions can be made in the NPS account.