The Pension Fund Regulatory and Development Authority (PFRDA) has expanded digital access to the National Pension System (NPS) with the launch of the ‘NPS Instant’ scheme. Under the new facility, new subscribers will be able to open an NPS account through UPI apps.
PFRDA Chairman S. Raman launched the initiative on Thursday. The facility is being introduced initially through the Bharat Interface for Money (BHIM) UPI app of the National Payments Corporation of India (NPCI).
Raman said the initiative is aimed at bringing more people into the NPS through UPI-based digital access. The regulator has set a target of adding around 2–3 crore new subscribers to the NPS over the next two years.
So far, five banks have joined the ‘NPS Instant’ initiative. These include State Bank of India, HDFC Bank, ICICI Bank, Axis Bank and IDFC First Bank.
Speaking on the occasion of NPS Day, Raman said the regulator expects around 2–3 crore subscribers to join the pension system over the next two years. He said the ‘NPS Instant’ facility would help expand the reach of NPS.
Under the new system, an NPS account can be opened through a UPI app using a KYC-verified bank account. Subscribers will also be able to make their NPS contributions through UPI.
The initiative is also expected to help expand pension coverage in medium-sized (Tier 2) and smaller (Tier 3) cities, where digital payment services have become increasingly accessible.
The PFRDA chief also expressed hope that more people working in the unorganised sector would join the pension scheme through ‘NPS Instant’.
Until now, customers could not directly open a new NPS account or join the pension system through BHIM or a bank’s UPI app. Existing subscribers, however, were able to make subsequent contributions through UPI.
To formally join the NPS, subscribers previously had to complete registration either online or offline and obtain a Permanent Retirement Account Number (PRAN).
The government introduced the contribution-based NPS on January 1, 2004, replacing the old pension system. Under NPS, individuals contribute during their working years, with their retirement savings invested in market-linked investment options. The accumulated funds are used to provide retirement benefits.
For Central Government employees, NPS is mandatory, while people working in the private sector can join the scheme voluntarily.