Bank Account Verification- PFRDA's PAN-PRAN-VPA (UPI) Authentication Process

The Pension Fund Regulatory and Development Authority (PFRDA) has implemented an advanced method of verifying subscribers' bank accounts via PAN-PRAN-VPA (UPI). The system employs the NPCI Framework, implying a full end-to-end digital process.

National Payments Corporation of India (NPCI), an initiative of the Reserve Bank of India (RBI) and the Indian Banks' Association (IBA), is an umbrella organisation for operating retail payments and settlement systems in India.

NPS are regulated by the PFRDA and are subscribed to by employees of the Government of India, state governments, private institutions and unorganised sectors.

What is PFRDA's PAN-PRAN- VPA(UPI) ?

According to PFRDA, it is an advanced mode of NPS Bank Account Verification (PAN-PRAN-VPA (UPI) where joint holder details, PAN and UPI Ids are verified through NPCI and matched with Permanent Retirement Account Number (PRAN).

Why was it introduced?

According to PFRDA, the latest process has significantly reduced fund returns due to incorrect bank account details, improved processing turnaround time, and served as an additional due diligence mechanism to verify beneficiaries' credentials while processing withdrawal claims.

Benefits of this system

• Errors in the payout process should be eliminated.
• Successful and timely processing of a withdrawal request from a subscriber who is a joint account holder.
• Simplified and binary The NPCI response, Active/Inactive, simplifies the due diligence process in comparison to the previous penny-drop framework, which is based on fuzzy logic of name matching.
• PAN linking in PRAN and matching of bank accounts

Advantages of using the Bank Account authentication

• Quick and efficient response.
• Works even if the Subscriber is the second or third account holder.
• Eliminating issues caused by longer names as a penny-drop process occasionally results in incomplete / curtailed names.
• Approach is simpler and more logical than penny-drop, which employs fuzzy logic of name matching.

Steps of Bank account verification of subscribers via PAN-PRAN-VPA (UPI)

1. A request is sent to NPCI with the user's PAN, account number, and IFSC code to see if the account number is linked to the PAN in the bank.

2. If the account number and PAN are linked in the bank, the letter Y is returned along with the account holder's name by NPCI. It also returns the UPI ID (if one exists), account type, and status of the bank account.

3. If the account number and PAN are not linked in the bank, NPCI returns N with no subscriber information.