Even though the Pension Fund Regulatory and Development Authority (PFRDA) had allowed using eKYC (Know Your Customer) back in October 2013, subscribers opening an account online still had to submit a physical application at the end of the online application process. In December 2016, the Authority did away with this requirement of submitting a physical form even if a subscriber opened an NPS account online. According to Sandeep Shrikhande, chief executive officer, Kotak Mahindra Pension Fund Ltd, the pension product has seen 70,000-75,000 accounts being opened through e-NPS till November 2016 (since the time e-NPS started in 2015). The new guidelines mean that you can now open an NPS account completely online. Let’s take a look at how one can register for e-NPS.
If you want to subscribe with NPS online, you can do so by visiting www.npstrust.org.in, and then going to eNPS. The minimum requirement for availing this facility is having a mobile phone number, an email ID and an active bank account with online banking facility.
You can create an NPS account using either of the two options available to complete the KYC process. One, you can use Aadhaar-based KYC, wherein you will be authenticated through an OTP that will be sent to the mobile phone number that is registered with Aadhaar. Once you authenticate yourself, the KYC information will be taken from the Aadhaar database. The other way to proceed is to give the permanent account number (PAN) and bank account details to complete the KYC authentication step. Once the authentication step is over—be it through Aadhaar or PAN plus bank account—you will have to make a few selections for your NPS account, such as pension fund manager, scheme preference and asset allocation.
At this stage you will also have to pick one from active or auto choice to determine the asset allocation.
Active choice allows you to select your own asset allocation. In auto choice, you have to just select a fund. If you do not select a fund under auto choice, the default fund will be moderate life cycle fund.
If you have chosen to register using PAN and bank account details, the next step for you will now be to upload a scanned photograph and scanned signature, and then make the initial contribution through internet banking, or debit or credit card.
You will be able to pay through internet banking of the selected bank only.
If you had selected Aadhaar-based registration, you have to upload a scanned signature. You can make your investment through Net banking from any bank’s account.
This is the stage where you earlier had to pay and then print the NPS form that you had filled online. You had to paste a photograph, sign the form and submit the printout within 90 days to the central record keeping agency.
Now, if you choose Aadhaar-based KYC, you don’t have to sign and send the physical form. You can simply e-sign. So, after making the payment, the next step is to e-sign. If you choose to e-sign with Aadhaar, an OTP will be sent to your mobile number registered with Aadhaar for authentication.
Once you key in the OTP and Aadhaar gets authenticated again, your registration will be considered as signed electronically.
In case you are opening the NPS account online but through a service provider (known as Point of Presence), to use the e-sign facility, you may need to pay Rs5.
The Aadhaar based e-sign makes the process smoother. “(But) we have observed that very few people really understand e-sign as the process is complicated. Instead they find it easier to just print and send a physical document,” said Shrikhande said. However, he added that about 60% of the total registrations for e-NPS use Aadhaar-based authentication for KYC.