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This article is more than 7 month old.

PFRDA allows Aadhaar-based e-KYC to open NPS account; details here

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The recent announcement led by PFRDA will simplify the onboarding process for NPS and APY subscribers as it infuses E-KYC facility for all functions from account opening to carrying any transaction to exiting these schemes.

PFRDA allows Aadhaar-based e-KYC to open NPS account; details here
The Pension Fund Regulatory and Development Authority (PFRDA) has recently allowed an online Aadhaar e-KYC process for onboarding of new subscribers under the National Pension System (NPS).
NPS, as we know, is a government-run investment scheme that gives the subscriber the option to set the preferred allocation to different asset classes.
According to Monish Salot, co-founder of Kwik.ID, the recent announcement led by PFRDA will simplify the onboarding process for NPS and APY subscribers as it infuses E-KYC (Know Your Customer) facility for all functions from account opening to carrying any transaction to exiting these schemes.
This initiative will provide relief to subscribers who had to earlier go through a tedious process of paperwork.
"Earlier, subscribers had to be present for in-person verification on the PoPs (points of physical presence) which resulted in a delay in the process of withdrawal as well as exit. Performing V-KYC would help them to eliminate the extra time and complete the entire process in a span of few minutes,” Salot opines.
E-KYC and V-KYC processes regulated by RBI amidst lockdown and social-distancing norms have been well-accepted by customers.
“With the mobile network percolation across all urban and rural cities of India, E-KYC will soon become a standard norm for customer identification and authentication process. Budget 2021 has also emphasized accelerating digital payments for efficient and seamless authentication processes for availing any financial services by allocating Rs 1,500 crore for digital adoption and infrastructure,” he added.
An individual can opt for an e-NPS through the following alternatives, either by providing Aadhaar details or by providing PAN details and KYC details that are recorded with the bank in which she/he maintains her/his bank account. Further, that bank is empanelled in eNPS.
An NPS account can be opened by a citizen of 18-65 years of age.
It offers two kinds of accounts — Tier 1 and Tier 2 — for instruments including government bonds, equity market and corporate debt.
While the Tier 1 NPS account is strictly a pension account, the Tier 2 account — known as an investment account — is a voluntary saving account associated with the PRAN.
Investment in a Tier 1 account offers income tax benefits. There is no tax benefit on the fund parked in a Tier II NPS account.
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