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Govt sets targets for banks for NPS subscription

Every rural branch of a PSB will have to get 150 subscriptions for NPS every year

June 25, 2012 4:22 IST | India Infoline News Service
Of the total subscription of 644,000 in 2011-12, public sector banks (PSBs) could issue only 501 subscriptions under new pension system (NPS), according to data collected by the Finance Ministry.

These subscriptions were generated through PSB branches which have been designated as points of presence (PoP). As on September-end 2011, out of the 26 government banks, 12 had registered about 8,000 branches as PoPs with the Pension Fund Regulatory and Development Authority.

However taking into consideration the poor subscription figures, the Finance Ministry has set targets for these PSBs. Every rural branch of a PSB will have to get 150 subscriptions for NPS, while urban branch of PSBs will have to generate 50 subscriptions every year. The move will ensure that the NPS is available to all citizens in the unorganised sector and the economically backward sections of society.

In 2010-11, the government launched the NPS for all citizens (18-60 years) in the unorganised sector. The NPS has been developed with the objective of providing old age income security to all citizens. The main attraction of the scheme is the fee—0.00009%, which is the lowest globally.

The Finance Minister then announced that all subscribers registered in FY2010-11 will be eligible for getting a contribution of Rs. 1,000 a year from the government for four years beginning the same financial year. Subscribers registered after 2010-11 will get the contribution up to 2013-14. The abovementioned contribution benefit is available only to persons who join the NPS with a minimum contribution of Rs. 1,000 and a maximum contribution of Rs. 12,000 per annum.

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