Sellers have no clue about New Pension Scheme

Forms not available at most institutions that are selling the scheme; officials not aware of procedures.

As an investment option, the New Pension Scheme (NPS) is not working out the way it was intended to. The reason: Institutions that are supposed to promote and sell the product are more or less clueless about it even though it has been a month since the scheme was launched on May 1.

When Business Standard visited the institutions that have been nominated to help investors enrol, few were aware of the procedures. There were no designated help desks. At best, one could only get the form.

At a leading public sector bank in Mumbai’s business district, Nariman Point, officials were clueless about even the forms. “Haven’t you read the newspapers? The scheme has not been launched due to a regulatory issue,” said an executive.

At another public sector bank, an official downloaded the form from the website of the Pension Fund Regulatory and Development Authority (PFRDA), the pension regulator.

When asked about the documents that should be accompany the form, the official said, “This cannot be submitted here as we have not received any official letter from the head office.” A top official of the bank agreed that no communication had been sent to the branches. “We are helpless. In NPS, distribution and marketing are grey areas. In fact, even we are talking to the authority (PFRDA) to get these issues resolved,” said the banker.

According to the banker, the PFRDA has not come up with any distribution guidelines. The bank sought pamphlets and flyers but did not get any response from the regulator. “I cannot make the publicity material as I will have to pay for it from my own pocket,” said the banker.

Both banks and non-banking finance companies that have been designated to sell NPS are sailing in the same boat. At branches of one of the largest public sector banks, the nominated investment consultant had no clue about how the scheme works. The executives responded with a polite sorry.

At two branches of a leading private sector bank, executives gave a similar response, “Download the form from the PFRDA’s website. Fill it up and give it to us. We will send it to them. The receipt and other documents will be couriered to your address.” They said check the PFRDA’s website to know how the scheme worked.

A large non-banking finance company with insurance and mutual fund businesses was more interested in selling its own insurance products than NPS. For the pension plan, the representative said download and fill the form. “Come with a photograph and identity proof. You will understand other things as you fill the form,’ said the representative.