The Pension Fund Regulatory and Development Authority of India (PFRDA) announced the launch of this facility via a circular dated October 27, 2021.
“Now in order to further increase the outreach and simplify the process of subscription, CRA (Central Recordkeeping agency) would be providing digital on boarding based through Aadhaar e-KYC as an additional option. Aadhaar XML based on boarding has already been made available for the benefit of Subscribers. These processes are paperless,” said the PFRDA circular.
How will the process work?
As per the circular, “the information fetched from the prospective subscribers through e-KYC technology framework viz Aadhaar details, demographic information, pension amount, mode of payment, spouse/nominee name and bank account information etc. shall be shared with the respective banks where the subscribers’ savings bank account is maintained through online information exchange for setting up of auto debit for the specified amount/mode based on the guaranteed pension amount opted by the subscriber. Post opening of APY Account, the subsequent servicing of subscribers would be offered by the respective APY service providers”.
Thus, to ease the process of subscribing to APY, PFRDA has asked all APY service providers banks to provide e-APY link on their respective corporate website for the benefit of their customers.
Further, CRAs have been advised to engage with all APY service providers for system-level integration so as to provide the functionality viz e-KYC based APY on-boarding and consent framework for Aadhaar seeding at the earliest.
Linking of Aadhaar-APY accounts
All the APY accounts are to be seeded with Aadhaar number for which the CRA will be providing functionality for facilitating the Aadhaar seeding of the existing APY subscribers through the proper consent mechanism. Additionally, APY service providers can also collect the Aadhaar details from their associated subscribers with due consent which would then be shared with CRA for seeding, as per the circular.
What is APY?
APY was launched by the government on June 1, 2015, to provide social security to those working in unorganised sectors. The scheme offers monthly pension of Rs 1,000/Rs 2,000/Rs 3,000/Rs 4,000/Rs 5,000 from the age of 60. You will be required to make a monthly contribution depending on the fixed amount of monthly pension chosen by you.
For instance, if you are of age 25 and want to receive pension of Rs 2,000 then you will be required to contribute Rs 151 per month till the age of 60, i.e., for 35 years. Similarly, if you wish to receive pension of Rs 5,000, then monthly contribution from your side will be Rs 376 for the next 35 years. The monthly contribution will remain the same throughout the contribution period.
Eligibility to open APY account
An individual is eligible to open an APY account if he/she satisfies the following conditions:
a) An Indian citizen
b) Has a valid bank account for auto-debit of monthly contribution
c) And is of between the ages of 18 years and 40 years
