BackGet set to pay service charge even on Aadhaar enabled e-NPS
This service charge, introduced in July this year, currently applies to: accounts that are opened through eNPS using the permanent account number (PAN), and contributions made using the e-NPS platform even as the accounts were opened offline through a point of presence
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Until now, if you opened an National Pension System (NPS) account online using your Aadhaar number, you didn’t have to pay a service charge. But the Pension Fund Regulatory and Development Authority (PFRDA) is now in the process of changing that.
This service charge, introduced in July this year, currently applies to: accounts that are opened through eNPS using the permanent account number (PAN), and contributions made using the e-NPS platform even as the accounts were opened offline through a point of presence (PoP). By levying a charge on Aadhaar-linked accounts, PFRDA will bring it on a par with the other options under e-NPS.
eNPS is the online platform through which you can open an NPS account and make contributions to it. You can open this account online by using your using PAN or Aadhaar.
If you are using the PAN, you also need to give your bank details for completing the know-your-customer (KYC) process. And you can only do it if your bank is empanelled with PFRDA.
Opening the account with Aadhaar is simpler. Just give your Aadhaar details on the online platform and verify the details with a one-time password (OTP). Read more about the process here: https://enps.nsdl.com
PoPs are entities such as banks that distribute NPS. When a PoP opens your account you pay it a subscriber registration charge of Rs125, and a distribution fee of 0.25%—minimum Rs20 and maximum Rs25,000—on all subsequent contributions. If you used the PAN to start your eNPS, you paid Rs125 to the bank as KYC authentication charge, and subsequently, you paid only the payment gateway charges. eNPS didn’t sit well with the PoPs. Banks felt that even if they opened an account, the subscriber later moved to eNPS to make contributions.
PFRDA decided that subscribers who opened their accounts online using PAN, would pay 0.05% of the contribution (maximum Rs5,000) as service fee to the empanelled bank—the associate PoP in this case. This charge was extended to subscribers who opened their accounts with a PoP but made contributions using eNPS. “Many banks complained that they spent time and energy in explaining NPS to the customer who then opened an account online or made contributions online,"said B.S. Bhandari, whole-time member, economics, PFRDA. This meant banks lost out on distribution fee.
This also tilted the scales in favour of Aadhaar-linked e-NPS. So PFRDA decided to levy a service charge of 0.05% on it as well and a one time account opening fee of Rs50. The money thus collected will go to the subscriber education and protection fund. PFRDA proposes to come out with a notification once it has all the back-end systems in place.
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