SBI, IDBI & Citibank asked by PF-RDA to improve pension plan sales

The Pension Fund Regulatory and Development Authority (PF-RDA) have issued instructions to the State Bank of India, IDBI Bank and Citibank to intensify efforts for selling products of the new pension system (NPS).

According to pension regulator, the three out of the 21 points of presence (PoPs) are not making enough efforts to attract more number of subscribers to NPS.

PFRDA Chairman D Sw­arup told, “I have written to SBI, IDBI and Citibank to step up efforts as PoPs. We feel they have not been pe­rforming to their pote­nt­ial.”

NPS started operation on May 1, since then up to August 7, as per latest figures by PFRDA IDBI has been able to sell just 52 fo­rms, SBI 36 forms and Cit­ibank a mere seven forms.

In a reply to why the regulator has pointed out only few entities when several other PoPs have not been able to sell a single form till last update, Swarup said as the operational size of the three banks is wider therefore the expectations from them was higher. He added, “T­hey are among the bigger o­nes that are not performing to their potential.”

Swarup informed the State Bank of India and IDBI ha­ve accepted the failure and have given the assurance to the regulator that they will step up efforts, as well as open more branches for selling NPS products and training of staff.

When contacted, Citibank officials refused to comment. A Citibank spokesperson said, “We do not comment on any regulatory matters or discussions with regulatory agencies”

The banks, which have performed better among the 21 PoPs, are ICICI Bank has sold 230 forms, followed by Kotak Mahindra Bank (189), Co­mputer Age Managem­ent Services (171), Axis Bank (141) and UTI Asset Management Company (124).

The singled out entities that have not been able to sell a single form include Central Bank of India, Oriental Ba­nk of Commerce, State Ba­nk of Bikaner and Jaipur, State Bank of Indore, State Bank of Mysore, State Bank of Patiala, State Bank of Travancore and Union Ba­nk of India. As on August 7 the total forms sold by these PoPs stand at a meager 1,200.

Swarup told, “I have not written to other entities, including the SBI subsidiaries. Some of them have not yet obtained digital signature certificates for electronic fund transfer, which is required for safe fund transfer. They are working on it.”

The banks in the NPS believe that the slow takeoff by the PoPs is because of lack of incentives on selling pension products under the system.

A top official wi­th UTI Retirement Solutions pointed out, “The PoP fees at Rs 20 per transaction is leading to low participation. This is the principal reason for the lack of enthusiasm among the points of presence to sell the product. The fee structure needs to be lo­oked into.”