The Pension Fund Regulatory and Development Authority (PFRDA) has launched a system for immediate bank account verification of subscribers of the National Pension System to guarantee well timed credit score of quantity in case of withdrawal proceeds.
The system, named ‘penny drop’, can be adopted by central recordkeeping companies (CRAs). It will check if the bank details supplied by the NPS subscriber is energetic and legitimate by crediting Re 1 into the account, the pension regulator mentioned.
The facility was reportedly launched after difficulties had been confronted whereas crediting the withdrawal quantity to the account of the subscriber due to a number of causes like invalid account quantity/account kind, invalid/unsuitable IFSC, identify mismatch, frozen/dormant account, closed/inactive account and so forth.
In a round, the PFRDA mentioned, “Due to unsuccessful transactions for the reasons as mentioned above, the amounts meant for the Subscribers could not be credited into the savings bank account remain with Trustee Bank till the correct account number is obtained from the Subscriber. This can be overcome with suitable technology intervention viz Instant Bank Account Verification.”
Under normal circumstances, an NPS subscriber locations a withdrawal or partial withdrawal request by mentioning details, together with the bank account quantity and IFSC code into which the withdrawal proceeds are to be credited. Once the withdrawal request is verified and authorised within the CRA system, the proceeds are credited by means of digital mode.
Once the ‘penny drop’ facility is in place, CRAs will check the energetic standing of the financial savings bank account and match the identify in account with the one utilized in PRAN (Permanent Retirement Account Number) or as per the paperwork submitted.
The account can be verified by making the ‘take a look at transaction’ by means of penny dropping a specified quantity, Re 1, into the beneficiary’s account and matching the details primarily based on the ‘penny drop’ response.
The ‘penny drop’ facility can be utilized on the time of processing of an exit/withdrawal request. The response of ‘success’ or ‘failure’ can be supplied by the service supplier primarily based on validation of the financial savings account quantity identify check as per CRA information.
If details don’t match, an alternate account quantity or further supporting paperwork would have to be submitted for updating the information and proceed with the withdrawal proceedings.