NPS Withdrawal Rule Changed: ‘Penny drop’ verification has been made mandatory for subscribers to withdraw money under the National Pension System (NPS). This will ensure timely transfer of shareholders’ money.
‘Penny drop’ verification has been made mandatory for subscribers to withdraw money under the National Pension System (NPS). This will ensure timely transfer of shareholders’ money. This information has been given by the Pension Fund Regulatory and Development Authority (PFRDA).
What is penny drop
Under the penny drop process, the record keeping central agencies (CRAs) look at the active status of the bank savings account and match the bank account number and the ‘PRAN’ (permanent retirement account number) or name given in the documents filed. These provisions will be applicable to all types of withdrawals in NPS, Atal Pension Yojana (APY) and NPS Lite as well as changes in bank account details of customers. The validity of the account is verified by placing a small amount in the beneficiary’s bank account and performing a ‘test transaction’ by matching the name based on the penny drop response.
Penny drop verification required
According to a recent notification from PFRDA, penny drop verification must be successful for name matching, processing exit/withdrawal applications and modifying the customer’s bank account details.
Campaign will run in November
Meanwhile, the Department of Pension and Pensioners’ Welfare will organize a nationwide Digital Life Certificate Campaign 2.0 in November, 2023 to enable 70 lakh central government pensioners to submit life certificates. Digital Life Certificate (DLC) camps will be organized at 500 locations in 100 cities across India in collaboration with 17 banks.
