According to a PFRDA circular dated January 4, 2023, “In line with the technological advancements and for ensuring seamless exit claim processing, it has been decided to allow the intermediaries to use technological intervention by using VCIP as an added due diligence mechanism for verification of the nominee/claimant/legal heir while processing the withdrawal claims in case of death of NPS subscribers”
PFRDA, via a circular dated October 6, 2020, had given intermediaries permission to use the Video Based Customer Identification Process (VCIP) for any NPS-related services, including onboarding and exit.
PFRDA has received representations from intermediaries requesting that VCIP be used to facilitate the processing of withdrawal claims in favour of nominees/claimants/legal heirs owing to the untimely death of NPS subscribers, stated the most recent PFRDA circular.
How nominee’s credentials can be verified
By strengthening the process’s security in terms of the confirmation that the nominee/claimant/legal heir is the same person who submits the documentation for processing the claim and by keeping a video record of the transaction, VCIP supports the intermediaries’ current due diligence efforts. Using Aadhaar e-KYC or DigiLocker, the nominee’s credentials can be verified.
According to the latest circular, “the process is optional for use by the intermediaries. However, PFRDA advises PoPs, especially Online PoPs to use the emerging technology for enhanced due diligence and error free/ timely processing of claims. NPS Trust may also use the above process while processing e-NPS death claims.”
“All the intermediaries are hereby informed to use Instant Bank Account Verification through penny drop for the purpose of verifying claimants’ bank account information as part of claim processing which allows independent verification of Bank Account and name matching,” the circular stated.
The intermediaries who, in addition to being registered with PFRDA, are also registered with other financial sector regulators are permitted to follow the VCIP guidelines issued by those regulators for carrying out for NPS-related activities as well, in order to prevent the intermediaries from being burdened further by the introduction of this facility. However, the intermediates who are entirely registered with and subject to the control of PFRDA will adhere to the rules set forth by PFRDA for carrying out VCIP, as per the release dated October 2020.
