PFRDA notifies new point of presence regulations for NPS subscribers

In a bid to further the ease of doing business, increase the use of digital mode and bring down compliance costs, the Pension Fund Regulatory and Development Authority (PFRDA) notified the new simplified Point of Presence (PoP) Regulations on Wednesday.

With this notification, banks and non-banks can now act as PoPs to onboard National Pension System (NPS) subscribers, and they will require only a single registration for NPS, instead of multiple registrations earlier. The timeline for disposing of applications has also been reduced from 60 days to 30 days, and banks can operate with just one branch with a wider digital presence.

The simplification in PoP regulations is in line with the Union Budget 2023-24 announcement to review regulations to reduce the cost of compliance and enhance the ease of doing business.

“To simplify, ease, and reduce the cost of compliance, financial sector regulators will be requested to carry out a comprehensive review of existing regulations,” Finance Minister Nirmala Sitharaman had said in her budget speech.

Put simply, PoPs are the first point of contact for NPS account holders in the NPS architecture, and they facilitate registration, contribution, and other transactions for NPS account holders. PoPs are entities that provide services under NPS through their network of branches called PoP Service Providers (PoP-SP).

For a PoP to be considered eligible, the new regulations stipulate a minimum net worth of Rs 2 crore, which shall include a minimum paid-up equity capital of Rs fifty lakh, as on the last day of the immediately preceding quarter, duly certified by the statutory auditor.