The pension regulator has written to both the Centre and the Central Board of Direct Taxes (CBDT) seeking tax breaks for contributions made to the Atal Pension Yojana (APY).

Officials of the Pension Fund Regulatory and Development Authority (PFRDA) clarified this to banking functionaries and other stakeholders during a brainstorming session here on Thursday.

Defined pension

The APY is open to all bank accountholders but is focussed on workers in the unorganised sector. It provides a defined pension, depending on the contribution and its period.

Subscribers would receive a minimum monthly pension, varying from ₹1,000 to ₹5,000 from the age of 60 years, depending on their contribution and based on the age of joining the scheme.

The minimum age of joining is 18 years and the maximum, 40 years. Therefore, the minimum period of contribution by any subscriber would be 20 years or more.

Talking to BusinessLine , Hemant Contractor, Chairman, PFRDA, said that banks have a great role in popularising this unique social security product meant for the unorganised sector.

No obstacle

“I don’t foresee any real obstacle (to pushing the product). It’s a question of talking to people, explaining the benefits of the product. It may take some time to generate the numbers.”

One question that is repeatedly asked is about the need to make contributions for a long period of time.

“This is a kind of forced saving that always helps in the long run. Its virtues need to be explained to the prospective beneficiaries. This probably takes time,” Contractor said.

“Banks are always hard-pressed for time and human resources. That’s the issue the scheme is facing,” he added.

Unique product

In terms of uniqueness, there is none available to beat the product, Contractor said. There’s no comparable product within the ecosystem. And that’s all the more reason why the product needs to be sold.

With a little effort, bankers will be able to do a lot in this regard. Banks have branches everywhere and cater to all sections of people.

They should really have no difficulty if they go about it in a planned and focussed manner.

In this regard, Kerala, being one of the most-banked States, can be a trend-setter. Some of the banks here have done exceedingly well with APY, he said.

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