Pension regulator ticks off SBI for not pushing NPS
Sidhartha / Mumbai Jul 25, 2009, 00:25 IST
The bank has managed to collect only 19 forms.
State Bank of India (SBI) might have a network of 11,000 branches, but ever since the launch of the new pension scheme (NPS) nearly three months ago, the country’s largest bank has managed to collect only 19 forms from prospective investors.
Peeved at the way public sector banks — which are points of presence (PoPs) for opening of NPS accounts and collection of contributions — were going about the new scheme, the Pension Fund Regulatory and Development Authority (PFRDA) has shot off a letter to SBI Chairman O P Bhatt, asking why the scheme was not being pushed.
While Bhatt is yet to respond, the missive, sent around 10 days ago, seems to have done the trick with the bank’s 26 designated branches accepting 17 forms since July 16. Though the latest data is not available, compared with other public sector banks (barring IDBI Bank), which have registered themselves as PoPs, SBI has fared better.
NO HARDSELLING
PoP
Branches
No of forms collected
ICICI Bank
49
164
Kotak Mahindra Bank
25
160
Cams
25
135
Axis Bank
51
106
UTI AMC
25
88
Reliance Capital
25
73
IL&FS Securities
35
61
South Indian Bank
55
34
IDBI Bank
52
14
Citibank
25
6
SBI
26
2
Total
843
Cams: Computer Age Management Services
Status as on July 16, 2009 Source: PFRDA
“We did not accept too many application forms through SBI’s associate banks. But we certainly expected a better show from SBI, Citi and IDBI Bank. It is quite clear that these banks made no preparation to ensure that the scheme is successful,” said a PFRDA official. Here it may be mentioned that existing regulations bar PoPs from hawking or pushing any particular fund manager.
As per the multi-layered NPS structure, PoPs are at the start of the chain, responsible for opening accounts and collecting the subscription to the scheme. Though players such as SBI, ICICI, UTI and Reliance are acting as PoPs, they have separate subsidiaries to deal with fund management activities.
When approached to open an NPS account, bank executives often fail to explain the details of the scheme, or name the branches where an account can be opened. PoPs, on their part, blame this failure on PFRDA, saying the authority is not making available adequate information.
Also, in the absence of tax benefits, investment consultants have been advising individuals against investing in the NPS. That apart, a management fee of only 0.09 basis points is also working as a dampener for fund managers. The result is, fund managers are pushing mutual fund and insurance policies that offer retirement benefits as well as higher commission.
When contacted, PFRDA Chairman D Swarup refused to discuss the performance of the PoPs. He, however, said that the tax benefits offered in the Budget would encourage individuals to invest in the NPS.
In addition, an exemption from payment of dividend distribution tax (DDT) and securities transaction tax (STT) would lower the transaction cost for fund managers, Swarup said.
The Budget had also proposed to allow investment in the NPS to be included in the tax exemption available under Section 80C of the Income Tax Act. Besides, tax benefits are proposed to be made available if a subscriber uses the entire maturity amount to purchase annuities.
I am discussing with diffrent brabches of SBI to open NPS account, but their officials seems not to be aware of this scheme & they are just forwarding me to next branch.
Mob - 9999884810
When I went to South Indian bank,bangalore they refused to accept cheque. I had to find an ATM and give them the cash. This will discourage people, with restrictions like NO CHEQUE.
I have contacted two three SBI branches. But they don't know anything about this NPS for all Indians and also your site is not showing the bank details. So you please infomr in which SBi branches collecting the NPS form and fund.
Posted by: satender
August 18 , 2010, 07:34 IST
I have conacted sbi hdfc lic and icici bank but they dont know anytging about this nps wear wich branch opne the account.
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