Use banking correspondents for APY, PFRDA tells banks

Regulator PFRDA has asked banks to employ their banking correspondents for increasing the coverage of Atal Pension Yojna among low income groups.

The objective of government's flagship Pradhan Mantri Jan-Dhan Yojana (PMJDY) PMJDY is to provide banking facilities to the unbanked, not only banking accounts, but also credit facilities and bring them under the fold of insurance and pension, PFRDA said in a statement.

Atal Pension Yojana is one of the vital component of PMJDY has reached a subscriber base of 37 lakh. "However the country's eligible population which is in the age group of 18-40 years is more than 46 crore, hence, banks which are the critical links of the scheme should actively employ Banking Correspondents (BCs) for reaching wider and unorganized low income people," said Pension Fund Regulatory and Development Authority (PFRDA).

There are over 1.70 lakh BCs operating in the country with different Banks, but very few of them are actively associated with APY, it added. PFRDA further said banks are sharing part of the promotional incentive provided by government with BCs and hence BCs can build a sustainable revenue model by sourcing APY.

"Banks used benefit from having savings bank accounts. APY collects regular monthly contributions only through auto debit from the account which adds up to the transactions in the account," it said.