NPS New Rule Mandatory-Requirements-for-Pension-Withdrawals-Revealed

NPS New Rule: The Pension Fund Regulatory and Development Authority (PFRDA) has recently implemented a new rule called “penny drop” verification for shareholders looking to withdraw funds from the National Pension System (NPS). This rule requires the Central Record Keeping Agencies (CRAs) to verify the authenticity and active status of a bank savings account before processing any withdrawal requests. In addition to the bank account number, the Permanent Retirement Account Number (PRAN) or the name provided in the submitted documents will also be cross-checked.

The process of penny drop verification is quite straightforward. The CRA will deposit a small amount into the beneficiary’s bank account and then perform a “test transaction” by matching the name associated with the penny drop response. If the name matches, the penny drop verification is considered successful.

Penny drop verification holds significant importance in ensuring that shareholders’ funds are accurately transferred to the intended bank account. It serves as a safeguard against fraud and identity theft, providing an added layer of security for NPS subscribers.

The benefits of implementing penny drop verification are threefold. Firstly, it guarantees the timely transfer of shareholders’ funds, ensuring that their financial needs are met promptly. Secondly, it serves as a deterrent to potential fraudulent activities, as the verification process acts as a filter to identify any discrepancies or mismatches. Lastly, it enhances transparency and accountability within the NPS system, fostering trust and confidence among subscribers.

As a result of this new rule, NPS subscribers must ensure that their bank account details are up-to-date and that their account remains active. It is also crucial for them to familiarize themselves with the penny drop verification process and allow sufficient time for it to be completed before initiating any fund withdrawals.

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In conclusion, the introduction of penny drop verification is a positive change for NPS subscribers. It guarantees the safety and security of their funds, minimizing the risk of fraudulent activities and ensuring that the funds are transferred to the correct bank account. This rule promotes accountability and transparency within the NPS system, ultimately benefiting the subscribers and strengthening their trust in the system.(NPS New Rule)

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