Starting April 1, the Pension Fund Regulatory and Development Authority (PFRDA) has made Know Your Customer (KYC) mandatory for the withdrawal and annuity of the National Pension System (NPS). This new rule will reduce the hassle for NPS members and save time during withdrawal and annuity. The investors of NPS and the concerned nodal offices will be responsible for uploading necessary documents and taking further action. According to the circular issued by PFRDA, all necessary documents have to be scanned and uploaded online; there is no need to submit the documents physically.
Read More: Bank of India Multi Cap Fund: A low risk option to diversify mutual fund investment
Currently, the process of withdrawing from NPS and taking annuity takes several months. Moreover, NPS holders have to go through a cumbersome process of submitting separate documents for withdrawal and annuity, which takes a lot of time to investigate. To initiate an online withdrawal request, NPS holders will have to log in to the Central Recordkeeping Agency (CRA) system, undergo e-Sign/OTP authentication, and authorize the request by the nodal office/POP. The necessary information will be provided to the member about the request made. The details of address, bank details, nominee, etc. will be auto-fetched from the NPS account while initiating the request. NPS holders will choose the percentage of lump sum/annuity amount.
Read More: IDFC MF set to launch India’s first international debt fund
The bank account of the NPS holder registered with CRA will be verified through online bank account verification. Required KYC documents, including the NPS withdrawal form, proof of identity and address, bank account proof, and photocopy of the PRAN card, will be uploaded at the time of request. After this, the request will be verified by selecting the option of e-sign through OTP authentication or Aadhaar. The nodal office will be responsible for further verification of documents after the request.
NPS holders should opt for OTP authentication via SMS and e-mail or e-sign via Aadhaar to complete the entire process digitally. They must ensure that the documents uploaded are clear, and they should check the name, date of birth, and nominee’s name before uploading them. The new rule will complete both the process of withdrawing and taking annuity simultaneously, which will save time for NPS holders. Currently, it takes about a month to process the NPS withdrawal after retirement, and the whole process of taking annuity and taking pension instead takes two to three months.
