The Reserve Bank of India (RBI) has rejected the Non Banking Financial Companies' (NBFCs) plea for undertaking the point of presence (POP) services for National Pension System (NPS). NBFCs had sought the central bank's approval for undertaking such services under the Pension Fund Regulatory and Development Authority for NPS. The central bank has examined the proposals and it has been decided, in public interest that NBFCs shall not undertake point of presence services for National Pension System.
The pension scheme is distributed through authorized entities called points of presence (POP) and almost all the banks are enrolled to act as POP. They are the first points of interaction of the pension subscriber with the NPS architecture under the Pension Fund Regulatory and Development Authority. The authorized branches of a POP, called point of presence service providers (POPSP), act as collection points and extend a number of customer services to NPS subscribers.
With an aim to provide financial security to every citizen by encouraging them to start contributing towards the old age saving, the NPS has been launched. The National Pension System, regulated by PFRDA is an attempt towards providing adequate retirement income to every citizen of India. NPS means the contributory pension system whereby contributions from subscribers along with matching contributions from respective governments as an employer, are collected and accumulated in an individual pension account.