PFRDA Mandates OTP Authentication for Paperless NPS Account Opening
PFRDA has updated NPS paperless onboarding rules to mandate OTP-based or e-sign authentication for online account registration. The revised framework requires explicit consent capture through these authentication methods at the end of the onboarding journey. Central Recordkeeping Agencies and Points of Presence must align their systems with these strengthened authentication requirements.
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The Pension Fund Regulatory and Development Authority (PFRDA) has strengthened authentication requirements for paperless National Pension System (NPS) account opening by making OTP-based or electronic signature verification mandatory for online registrations.
New Authentication Requirements
Under the revised framework, applicants opening NPS accounts online must now authenticate their registration through one of two methods:
- Electronic signature (e-sign) verification
- One-time password (OTP) sent to their registered mobile number
The regulator has clarified that applicants' consent and mandatory declarations for opening an NPS account must be explicitly obtained at the end of the online onboarding journey through these authentication methods.
Implementation Framework
| Parameter | Details |
|---|---|
| Authentication Methods | E-sign or Mobile OTP |
| Implementation Scope | Central Recordkeeping Agencies and Points of Presence |
| Legal Authority | Section 14 of PFRDA Act, 2013 |
| Previous Circular | June 2020 (partially modified) |
PFRDA has directed Central Recordkeeping Agencies (CRAs) and Points of Presence (POPs) to align their systems and subscriber onboarding processes with the updated requirements. This involves changes to digital workflows to ensure authentication and consent capture occur as specified in the new guidelines.
Regulatory Background
The circular partially modifies an earlier directive issued in June 2020, which had allowed digital submission of NPS account opening forms using e-sign or OTP. The current update specifically mandates these authentication methods rather than treating them as optional features.
PFRDA issued this circular under the powers conferred by Section 14 of the Pension Fund Regulatory and Development Authority Act, 2013. The change aims to strengthen subscriber authentication while continuing to support paperless account opening processes.
System Integration Requirements
The updated requirements necessitate system modifications across the NPS ecosystem. CRAs and POPs must ensure their digital platforms can capture explicit consent and mandatory declarations through the specified authentication methods at the conclusion of the online onboarding process.
The National Pension System operates as a voluntary, long-term retirement savings scheme regulated by PFRDA, with CRAs and POPs playing crucial roles in subscriber registration, recordkeeping, and servicing functions.
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