Summary of this article
NPS Tatkal enables digital pension account opening through BHIM UPI.
PFRDA expects 2-3 crore new NPS subscribers within two years.
Five bank customers can currently use the BHIM facility.
The process of opening a National Pension System (NPS) account is now available through the BHIM UPI app for customers of select banks. The new facility, called NPS Tatkal, allows eligible users to complete registration and make their first contribution digitally.
The Pension Fund Regulatory and Development Authority (PFRDA) expects the facility to help add around two to three crore NPS subscribers over the next two years. The regulator also expects the UPI-based process to help reach people who have not been covered by formal retirement schemes.
What Is NPS Tatkal
NPS Tatkal allows a person to open an NPS account through BHIM instead of going through a separate registration process. The facility uses an existing KYC-verified bank account for the account-opening journey.
Earlier, customers could use BHIM and other UPI apps to put money into an existing NPS account. However, they could not use these platforms to directly start a new NPS account.
Under the new process, the first contribution is also made through UPI. There is no requirement for physical paperwork.
How To Open An NPS Account On BHIM
A person looking to open an account first needs to access the NPS option in the BHIM app. This is available under the bill payment section.
The applicant then provides basic information, including the date of birth, and selects an eligible bank account from the options displayed.
The final step is to make the first contribution through UPI. The minimum contribution required through this route is Rs 250. Once the transaction and KYC checks are completed, the subscriber gets a Permanent Retirement Account Number (PRAN), which activates the NPS account.
Which Bank Customers Can Use NPS Tatkal
The facility is currently available to customers of State Bank of India, ICICI Bank, HDFC Bank, Axis Bank and IDFC FIRST Bank.
Customers whose bank is not part of the participating group cannot currently use the BHIM-based route to open an NPS account.
PFRDA expects the simpler registration process to have a wider impact in tier-2 and tier-3 cities. It could also provide another route into retirement savings for people working outside the formal employment system.
NPS is a market-linked retirement savings system. Subscribers make contributions during their working years, while the money is invested in financial instruments permitted under the scheme.
