The Pension Fund Regulatory and Development Authority (PFRDA) has made ‘penny drop’ verification mandatory for the withdrawal of funds by subscribers of the National Pension System (NPS) for the timely transfer of money.
Key points
- Through the ‘penny drop’ process, Central Recordkeeping Agencies (CRA) check the active status of the savings bank account and match the name in the bank account number with the name in the PRAN (Permanent Retirement Account Number), or according to the documents submitted.
- The provisions will apply across the NPS, the Atal Pension Yojana (APY), and NPS Lite for all types of exits/withdrawals as well as for modification in the subscribers’ bank account details.
- The validity of the account is verified by making a ‘test transaction’ by dropping a small amount into the beneficiary’s bank account and matching the name based on the penny drop response.
