According to the Pension Fund Regulatory and Development Authority’s (PFRDA) press release issued on October 6, 2020, “PFRDA has now permitted its intermediaries to use of Video based Customer Identification Process (VCIP), in addition to the existing options, in order to further facilitate onboarding, withdrawals, exit and for processing of other related service requests of NPS Subscribers.”
This comes a month after the insurance regulator announced that insurance companies can use the video KYC facility to use real-time video-based authentication methods to vet customer credentials for new onboardings. At present bank and mutual fund houses allow their customers to complete their KYC process using the video facility.
Why VCIP process is required
Currently, a lot of NPS services have been moved online including onboarding of new subscribers and their servicing. However, even now NPS subscribers have to be physically present at POPs (Points of Presence) for in-person verification (IPV) to complete the process of exit and some other allied services. This requirement of compulsory physical presence was posing a challenge for subscribers as well as PoPs/Nodal officers which had led to subscribers raising grievances and even delays the process of withdrawal and exit, as per the release.
In order to ensure that the intermediaries are not additionally burdened for introducing this facility, the intermediaries which apart from being registered with PFRDA, are registered with other Financial Sector Regulators also, are allowed to follow the VCIP guidelines issued by those regulators for performing for NPS related activities also. However, the intermediaries which are solely registered and regulated by PFRDA, will follow the guidelines issued by PFRDA for performing VCIP, as per the release.