PFRDA Expects 50 Lakh New Subscriber For Atal Pension Yojana (APY)
The Pension Fund Regulatory and Development Authority (PFRDA) expects to add 50 lakh new subscriber to the Atal Pension Yojana (APY), a guaranteed pension scheme for Indian citizens, in the current financial year ending March 2019, a top official of the pension fund regulator said.
Since the scheme was launched in May 2015, it has added over 1 crore subscriber, with the current subscriber base standing at around 1.10 crore.
Every month we add 3 lakh to 3.5 lakh accounts. The subscriber base is growing strongly, especially in the last financial year (2017-18), we could do nearly 49 lakh accounts. For the first two years, we did only 25 lakh accounts (each year), but in the third year there has been a quantum jump, general manager, PFRDA, told.
Of the total APY accounts opened thus far, around 75 per cent of the accounts are regular accounts (accounts where a holder is making regular monthly contributions) he added.
As of now, Indian citizens aged between 18 years to 40 years can invest in APY. The pension scheme contribution that an individual has to make per month varies according to his or her age. One can opt for monthly pension between Rs 1,000 to Rs 5,000. Given that an individual will start receiving the pension from the age of 60, the earlier he or she subscribes to APY, the monthly contribution that needs to be made will be lower.
PFRDA has sent a proposal to the government to double the pension offered under APY.
The DFS (department of financial services) has said it is considering increasing the pension and also increasing the age. Current eligibility to join APY is up to 40 years of age. The proposal is to increase this to up to 50 years. However, there is no timeline given by the government as of now.
In order to continue the momentum APY has now been able to build over the last year, PFRDA is holding interactions and review meetings with banks across major cities, to address any challenges.
To motivate the banks to push APY, the government is also giving incentives, he pointed. For instance, for each APY account, a bank is paid Rs 120. Furthermore, for each account that is regular, a bank gets Rs 100 per year. These measures will also help banks increase their fee income.
APY accounts can be opened through banks. Furthermore, to attract new subscribers, PFRDA is opening new channels, like opening account digitally without going to a particular bank. This can be done through existing internet banking channels of banks or through National Securities Depository Ltd (NSDL), which is the central record keeping agency. PFRDA has also developed a mobile application, through which a subscriber can track his or her APY investments, and there have been over 2 lakh downloads of the app.
APY will also now be given an aggressive push through the Postal department. While APY has introduced through the postal department in 2017 itself, this year, it will be available across 20,000 postal branches in India, which should drive a higher subscription.
The banking correspondent channel will also be strengthened. Also, small finance banks and payment banks will now be able to introduce APY services.
Given that APY is a guaranteed pension scheme, any shortfall in funding will have to be made up by funds from the government. The PFRDA is in the midst of appointing an actuary, who will look into the amount of this gap funding that may be required.
Source Link- https://www.theweek.in/