The Pension Fund Regulatory and Development Authority (PFRDA) has proposed to provide additional option to exit from NPS through an online process for e-NPS subscribers.
Currently, an e-NPS account can be opened online, however, to exit the scheme there is no online process. According to the PFRDA press release, issued on May 27, the proposed online process of e-NPS exit would be akin to the existing online e-NPS platform already in use for opening NPS accounts by customers of Bank-Point of Presence (POP). In the proposed online exit process, the KYC of e-NPS subscribers shall be verified by the respective Bank-POPs where these subscribers have their existing banking relationship. Banks shall also be eligible for payment of processing fees.
“This option of online exit will be applicable for both i.e. for pre-mature as well as normal exit, in terms of provisions of the PFRDA (Exit and Withdrawal under National Pension System) Regulations 2015,” PFRDA stated. The additional process of e-NPS exits will co-exist along with the existing modes of handling of e- NPS exits, i.e., the offline routes.
The Central Record Keeping Agencies (CRAs) have been advised to develop online ‘e-NPS exit functionality’ in co-ordination with Banks to facilitate the online process of exit of e-NPS subscribers who are also the customers of those banks, as per the release.
PFRDA has stated that the online exit process will be implemented shortly.
Current offline exit process: Under the existing offline process, the e-NPS subscriber has to approach the Bank-POP to get his withdrawal request processed by shifting his NPS account through Inter-Sector Shifting (ISS) from ‘e NPS’ to the ‘Bank- POP. Thereafter, the NPS withdrawal forms along with the specified documents have to be submitted to the Bank-POP for authorisation, to enable the CRA to proceed with the exit process.
How to exit online under e-NPS
According to the PFRDA press release, in the case of a normal/premature exit, one should follow these steps:
- An option will be available in the respective CRA website for the subscriber to submit withdrawal request. For this purpose, limited access would be provided on CRA Website to the subscriber to provide withdrawal request details and upload scanned documents.
- The subscriber shall provide details of bank account, address etc. and upload scanned copies of his KYC documents and bank account proof.
- The option of e-sign shall be provided to make the process paperless.
- Once withdrawal request is successfully submitted online by the subscriber with e- sign, KYC documents shall be displayed online to Bank-POP for verification. The verification of the documents would be done by the subscriber’s bank.
- Once verified, the exit would be processed by the CRA.
Fees for processing e-NPS exits to Bank-POPs
Banks will get a fee at 0.125 per cent of the total NPS corpus (minimum amount of Rs 125 and maximum Rs 500). These proposed charges to Bank-POPs would be applicable for both online/offline KYC verification process related to e-NPS exits, as per the release.
Exit e-NPS due to death of subscriber
However, claims arising due to death of NPS subscribers, will be handled offline by the NPS Trust. Here are the steps to follow:
- The nominee/claimants can also opt to submit the exit form to NPS Trust with the required documents after verification of his KYC by his bank. The nominee has to get a Bank’s KYC confirmation on bank’s letterhead containing the photo and signature of the nominee.
- The Bank’s letter needs to be signed with seal by the designated bank official where the nominee has the bank account and where the claimants would like to receive the lump sum and/ or annuity and submit the same to NPS Trust,
- Post receipt of duly verified documents, NPS Trust will authorize the withdrawal request after due diligence and after satisfying themselves about the veracity of the claim.
- Address of NPS Trust: National Pension System Trust, 3rd Floor, Chatrapati Shivaji Bhawan, B-14/d, Qutab Institutional Area, New Delhi – 11006