PFRDA proposes changes in premature exit rules for Atal Pension Yojana, facilitates timely payment of money

NEW DELHI: To increase acceptability of Atal Pension Yojana (APY) scheme among informal sector workers, the Pension Fund Regulatory Development Authority (PFRDA) has proposed modifications in premature exit processing for the benefit of subscribers.

APY is a social security scheme administered by PFRDA through banks the department of post. The scheme offers guaranteed pension benefits to eligible citizens after reaching the age of 60 years, who subscribe contribute to the scheme.

According to a PFRDA circular issued on 3 September, “The existing mode of premature withdrawal under APY is examined from time to time by PFRDA based on the inputs/suggestions received from various stakeholders the changes are proposed with suitable technological intervention.”

The scheme will introduce instant bank account verification in the interest of underlying subscribers for the orderly processing of their exit requests.

The following guidelines are issued for facilitating timely transfer of withdrawal amount in the bank account of APY subscribers also as additional due diligence to protect their corpus lying in the Permanent Retirement Account Number (PRAN). 

There could be two scenarios at the time of exit which are explained as under:

A. If the SB account details of subscribers at the time onboarding & exit are the same

1. APY subscriber should incorporate the field indicating active status of savings bank (SB) account in the revised exit file format provided by CRA which is mandatory from 15 September, 2021.

2. Instant Bank Account verification by penny drop shall also be undertaken by CRA to verify the operative status of savings account as part of enhanced due diligence.

3. The above changes are being implemented to enable CRA system to process the premature withdrawal requests where the associated SB Account is operative so as to ensure receipt of APY account closure proceeds in the SB account, as per the PFRDA circular.

4. If the associated savings account is closed/dormant, the modified process ensures preservation of subscribers’ contribution in the PRAN itself to generate optimum market-based returns.

B. If the savings account details at the time of onboarding & exit are not the same, different account numbers of the same bank or the different bank

1. Subscribers are advised thatAPY closure proceeds be credited to the same bank account number may accept the request with a different account number or account of a different bank only as an exception. Such requests are to be accompanied by proof of alternate account number acceptable to the bank, as per the PFRDA circular.

2. Instant Bank Account verification by penny drop shall be undertaken by CRA as part of enhanced due diligence including name matching between PRAN bank account number.

3. Exit requests with mismatches or with unsuccessful account verification, post penny drop is to be confirmed by respective APY subscriber for further processing of exit requests by CRA, as per the circular.

4.Subscribers are to be educated to keep their respective bank account active when they submit their premature withdrawal request the request is processed. A suitable undertaking can be obtained from the subscriber as part of the withdrawal request.

5. The applicable charges for instant bank account verification would be recovered by CRA from the respective PRAN for reimbursement to service provider. Prevailing charges for verifying bank account number through penny drop is Rs2.40 tax, as per the PFRDA circular.

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