Govt banks fail to sell NPS well

It is not the private players but rather government banks that have not been able to sell the New Pension Scheme (NPS).

It is not the private players but rather government banks that have not been able to sell the New Pension Scheme (NPS). Eight of the 21 points of presence appointed by the pension regulator to distribute the scheme have not registered even a single applicant in the last three and a half months. Of the 724 branches that are distributing the scheme,495 centres have attracted just 1,200 subscribers.

ICICI Bank,which has dedicated 49 branches,has gathered 230 subscriptions so far. This is in contrast with some government banks such as the Oriental Bank of Commerce. OBC has 50 branches but no NPS subscribers. The regulator is managing a pension corpus of more than Rs 1 crore for these subscribers.

To expand the reach of the scheme,the pension regulator is now planning to bring India Post on board. The Indian postal department has now officially shown interest in distributing the scheme. We should be able to include post offices in the list of our distributors within a couple of weeks, said D Swarup,chairman,Pension Fund Regulatory and Development Authority (PFRDA).

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India post operates around 10,000 electronically connected post offices across the country. If included,these can expand the footprint of the scheme to the rural areas of the country.

To make NPS accessible to people in the lower strata,the regulator is also planning to lower the annual central record keeping agency (CRA) charge to Rs 50 from Rs 350 at present. A lot of federations and groups like anganwadi workers have shown interest in the scheme. To make the scheme affordable for them,we plan to talk to NSDL (National Securities Depository Limited) and bring down the CRA charge to Rs 50. Hopefully,some decision will be taken by the next month, said Swarup.

Despite its merits,NPS hasnt been able to get to a flying start. Lack of interest of distributors in promoting the scheme and awareness among people has led to such a lukewarm response. The scheme is undoubtedly the best pension scheme available in India. But not much has been done by the regulator to promote it. There is a lot of latent demand that needs to be translated into active subscription and that can only be done by strengthening distribution and creating awareness, said an industry expert requesting anonymity.