Pension regulator PFRDA has asked the Chairmen of Sponsor Banks of RRBs to enable their Regional Rural Banks (RRBs) to offer National Pension System (NPS), its Chairman Deepak Mohanty said on Tuesday.
This would help expand the overall pension envelope in the country as people with higher income in rural areas can also take NPS, he said.
“RRBs are doing well in the case of Atal Pension Yojana (APY). They can also offer NPS and those who are better off in rural and semi urban areas can go for NPS. There is no exclusivity and somebody who has APY can take NPS on top of it,“ Mohanty said.
NPS could also be suitable for the kind of income one gets in rural areas, which is seasonal income. “Incomes could be lumpy. When you do harvest there will be lot of money and you often don’t know what to do with it, “ he noted.
On Tuesday, Pension Fund Regulatory and Development Authority (PFRDA) also asked banks to activate all their urban branches so that APY reaches more urban poor.
This advice came at Strategy Review meeting (North Zone) that PFRDA conducted in the capital for expansion of the APY, a pension scheme designed for the informal sector.
Lifelong minimum guaranteed pension
Under APY, a subscriber would receive a lifelong minimum guaranteed pension of ₹1,000 to ₹5,000 per month from the age of 60 years, depending on their contributions, which itself would vary based on the age of joining the APY.
Currently, the gross enrolment of APY stood at 5.2 crore subscribers and total assets under management stood at about ₹29,200 crore as of July 8.
It maybe recalled that PFRDA had for 2023-24 set a modest enrolment target of 1.34 crore for APY. Last fiscal, the total number of APY enrolments stood at 1.19 crore.
In the first quarter this fiscal, there were as many as 29 lakh new subscribers (across the country) to APY. This was marginally higher than level of 27 lakh new APY subscribers in same quarter last fiscal.
For the Northern region (which comprises of ten States), the PFRDA has set a target of 46 lakh new APY enrolments for current fiscal, Mohanty said. Even last fiscal, the target was set at 46 lakhs and banks had surpassed this target, he noted.
‘Investment scheme’
APY is a good scheme and should not only be seen as a pension scheme, but also as an investment scheme, Mohanty said.
Compared with the potential the current enrolment level for APY is less, said Mohanty, highlighting that there are 49 crore Jan Dhan accounts in the country and the eligible cohort (18-40 years) for APY would be about 25 crore people.