PFRDA expects NPS Tatkal to add around 3 cr subscribers in 2 years: How does the instant pension account facility work?

Pension Fund Regulatory and Development Authority (PFRDA) Chairperson S Ramann said on Thursday that it expects the National Pension System (NPS) to add around 2-3 crore new subscribers in the next two years.

The growth is expected to be driven by the recently introduced ‘NPS Tatkal’ facility, which aims to make the NPS account opening process faster and easier, the regulatory body’s top executive told PTI on the sidelines of NPS Diwas.

The government introduced NPS on January 1, 2004, replacing the old pension scheme. Under the latest scheme’s framework, subscribers contribute during their working years, with the corpus invested in market-linked instruments.

At retirement, the accumulated corpus is used to provide retirement benefits, including through annuity-based income. While the NPS is mandatory for central government employees, private sector individuals may also join voluntarily.

NPS Tatkal to boost pension coverage in smaller cities

The NPS Tatkal facility is also expected to expand pension coverage among people living across tier-2 and tier-3 cities.

Ramann said the facility could also encourage more people from the informal sector to join the pension system, helping extend NPS coverage beyond salaried and formal-sector workers.

What is NPS tatkal scheme?

Until now, customers could not directly enrol in NPS or open a new NPS account through the BHIM app or their bank’s UPI app, although they could use these platforms to make subsequent contributions.

To formally join the NPS, subscribers had to first register online or offline to obtain a Permanent Retirement Account Number.

Through the ‘NPS Tatkal’ scheme, PFRDA will onboard new NPS subscribers through UPI, beginning with NPCI’s BHIM UPI application. This can be done by using a KYC-verified bank account and contributions can be made through the online payment option.

How to open an NPS account on the BHIM App?

NPS Tatkal scheme enables individuals to complete their pension account-opening process in just three steps after downloading the BHIM Payments App. Follow the given steps:

Step 1: Open the BHIM app, click on the ‘view all’ option under the recharges and bill payment section on the homescreen, then navigate to the NPS tab.

Step 2: Provide basic details like your date of birth.

Step 3: Choose the eligible bank account presented during the journey.

Step 4: Authorize your first minimum contribution starting at ₹250 using UPI to generate your PRAN and activate your account.

Which bank customers are eligible to apply?

Ramann also reiterated that as of now, customers of State Bank of India (SBI), ICICI Bank, HDFC Bank, Axis Bank, and IDFC FIRST Bank can use the facility to open an NPS account through the BHIM app.

This means the facility is currently available only to customers of the participating banks listed by the regulator.

There is no need to submit physical paperwork, as the entire process is digital and KYC is completed instantly. The Tatkal route aims to simplify and speed up the process of opening an NPS account.

The regulator has consistently encouraged users to begin building their retirement corpus through NPS, especially those who remain outside the scope of Employees’ Provident Fund (EPF) or any other formal pension scheme.

(With inputs from PTI)