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PFRDA Revises Premature Exit Rules of Atal Pension Yojana: Know All

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Atal Pension Yojana (APY) is a guaranteed pension scheme of the Government of India. The scheme is mainly beneficial for all citizens of the unorganized sector. The Pension Fund Regulatory and Development Authority (PFRDA) administers the plan through banks and the Department of Post. After reaching the age of 60, eligible Indian citizens who enroll and contribute to the scheme are entitled to guaranteed pension benefits. Subscribers to the APY get a guaranteed minimum monthly pension of between Rs. 1000 and Rs. 5000 each month.

 
PFRDA Revises Premature Exit Rules of Atal Pension Yojana: Know All

Under the scheme, premature exit before the age of 60 is only authorized only in extreme situations, such as the death of a beneficiary or the onset of a life-threatening illness. However, recently PFRDA has revised premature exit rules of APY. According to the circular issued on 3rd September 2021 "The existing mode of premature withdrawal under APY is examined from time to time by PFRDA based on the inputs/suggestions received from various stake holders and the changes are proposed with suitable technological intervention."

In order to expedite the administration of underlying Subscribers' exit applications, PFRDA has now implemented Instant Bank Account Verification feature. PFRDA has said that "The following guidelines are issued for facilitating timely transfer of withdrawal amount in the Bank Account of APY Subscribers and also as an additional due diligence to protect their corpus lying in the Permanent Retirement Account Number (PRAN)." At the time of exit, there could be two scenarios, as stated below according to the new guidelines of PFRDA:

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

1. APY-SP should incorporate the field indicating the active status of Savings Bank (SB) Account in the revised exit file format provided by CRA which is mandatory w.e.f. Sep 15th, 2021.

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

 

3. The above changes are being implemented to enable the 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.

4. If the associated SB Account is closed/dormant, the modified process ensures the preservation of Subscribers' contribution in the PRAN itself to generate optimum market-based returns.

B. If the SB account details at the time of onboarding & exit are not same, different Account Number of same Bank or the different Bank

1. APY SPs are advised that the APY closure proceeds are credited to the same Bank Account number and 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.

2. "Instant Bank Account verification by penny drop" shall be undertaken by CRA as part of enhanced due diligence including the name matching between PRAN and Bank Account Number.

3. The exit requests with mismatches or with unsuccessful account verification, post penny drop is to be confirmed by the respective APY-SP for further processing of exit requests by CRA.

4. APY Subscribers are to be educated by APY-SP to keep their respective Bank account active when they submit their premature withdrawal request, till their request for a premature withdrawal 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 further reimbursement to the service provider. The prevailing charges for verifying Bank Account Number through penny drop is Rs. 2.40/- and tax.

Source: PFRDA

Read more about: apy atal pension yojana
Story first published: Wednesday, September 15, 2021, 10:10 [IST]
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