The Pension Fund Regulatory and Development Authority (PFRDA) on October 25, 2023, issued a notification regarding the Mandatory Penny drop verification - Instant Bank Account Verification for Enhanced Due Diligence w.r.t. Exit/Withdrawal requests and for modifying the subscriber's bank account details.
The following has been stated namely: -
• Reference is drawn to the Circular no PFRDA/2021/21/SUP-NPST/2 dated July 20, 2021, on the subject of Instant Bank Account Verification for enhanced due diligence under the Exit/Withdrawal process of NPS. A copy of the circular is enclosed as annexure.
• Para 7 of the said Circular has been modified as under:
1. “The penny drop verification has to be necessarily successful with name matching, for processing the Exit/Withdrawal requests, and also for modifying the subscriber's bank account details. No request for Exit/Withdrawal, and or for modifying the subscriber's bank account details shall be allowed in case of failure of penny drop verification by the CRA.”
The above-stated provision shall be applicable across sectors i.e. NPS, APY, and NPS Lite for all types of Exits/withdrawals as well as for modification in subscribers' bank account details.
2. In case of penny drop failure (irrespective of the reason), the same shall be taken up by the CRA with the concerned nodal office/intermediary for modification in bank account details in the subscriber account through a set process and after following the proper due diligence.
3. CRA shall send communications to the subscriber on his/her mobile number and e-mail on the penny drop failure and advise him/her to contact his/her nodal officer or POP as the case may be.
4. Simultaneously, the CRA has to send communication to the concerned nodal office or POP intimating the failure of penny drop verification.
• The enhanced due diligence advised above is to be effected immediately. CRAs must complete the development of said functionality & required system-level utilities within a period of 30 days from October 25, 2023.
[Notification No. PFRDA/2023/29/Sup-CRA/09]
