NPS and Atal Pension Yojana Exit, Withdrawal Rule Change: The Pension Fund Regulatory and Development Authority (PFRDA) has mandated Penny drop verification – Instant Bank Account Verification for subscribers to the National Pension System (NPS) and Atal Pension Yojana (APY) which is likely to benefit the investors at the time of exit or withdrawal request.
The verification of the subscriber’s bank account will be done by the penny drop verification to match all the details in case of exit or withdrawal and modifying the subscriber’s bank account details.
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NPS and Atal Pension Yojana Exit, Withdrawal Rule Change
The new mandate is applicable to NPS, Atal Pension Yojana (APY) and NPS Lite for all types of Exits/withdrawals as well as for modification in subscribers’ bank account details.
Central Recordkeeping Agencies (CRA) which is responsible for the centralized recordkeeping for all NPS subscribers will not process the request for exit/withdrawal, and even for any modification in the subscriber’s bank account in case there is a failure of penny drop verification.
PFRDA in a circular date 25th October, stated “The penny drop verification has to be necessarily successful with name matching, for processing the Exit / Withdrawal requests, and also for modifying the subscriber’s bank account details. No request for Exit / Withdrawal, and or for modifying the subscriber’s bank account details shall be allowed in case of failure of penny drop verification by the CRA.”
“The above-stated provision shall be applicable across sectors i.e. NPS, APY and NPS Lite for all types of Exits/withdrawals as well as for modification in subscribers’ bank account details,” it added.
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What will happen in case penny drop verification fails?
1) In case of penny drop failure, the same will be be taken up by the CRA with the concerned nodal office/intermediary for modification in bank account details in the subscriber account.
2) CRA will send communications to the subscriber on his/her mobile number and e-mail on the penny drop failure and advising him/her to contact his/her nodal officer or POP.
What is Penny drop verification?
It is a method used for validating a bank account, which involves depositing a small amount of money, usually Re 1, into the account.
