The Centre’s social security scheme for the aged — the Atal Pension Yojana (APY) — will now also be available at small finance and payments banks, the Finance Ministry said on Friday.

“To strengthen the existing channels of APY distribution, it is felt that these new payments banks and small finance banks will provide a boost to the outreach of subscribers under APY,” said an official release, adding that given their strength, expertise and reach, they can play a pivotal role in outreach of subscribers.

The APY was launched by Prime Minister Narendra Modi on May 9, 2015, as the first ever guaranteed pension product, open to all citizens between the ages of 18 and 40 years. It provides a minimum guaranteed pension of ₹1,000 to ₹5,000 per month, after the age of 60 years, depending on the monthly contribution made by a subscriber.

At present, the APY has over 84 lakh subscribers and overall assets of ₹3,194 crore.

Earlier this month, the pension regulator — Pension Fund Regulatory and Development Authority — had conducted a workshop on the scheme and discussed the implementation of the scheme with the banks.

“All small finance banks and payment banks have responded positively,” said the Finance Ministry.

It noted that participation in APY also provides a sustainable fee income to banks though an incentive of ₹120-150 per account.

The Reserve Bank of India had given licence to 11 payments banks and 10 small finance banks. Of these, nine small finance banks — including Ujjivan, Janalakshmi and Equitas — and four payments banks, which include Airtel Payments Bank and Paytm Payments Bank, have already started operations.

Related Topics
comment COMMENT NOW