PFRDA introduced an advanced mode for bank account verification of the subscribers

The PAN-PRAN- VPA(UPI) method of bank account verification for subscribers has been introduced by the Pension Fund Regulatory and Development Authority (PFRDA) and has interesting features. In this method, the information the about joint account holders, their PANs, and their UPI IDs are confirmed by NPCI and matched with Permanent Retirement Acct Numbers (PRAN)
In a press release dated January 12, 2023, PFRDA stated that it was "pleased to introduce an advanced mode of Bank Acct Verification of the Subscribers (PAN-PRAN- VPA(UPI)) with elegant features where the joint holder details, PAN and UPI Ids are verified through NPCI and matched with Permanent Retirement Acct Number (PRAN)" as part of the Azadi Ka Amrit Mahotsav (AKAM)
The feature is currently offered by CAMS CRA. The PAN-PRAN- VPA(UPI) verification, made available by NPCI, is urged by PFRDA to be incorporated by all CRAs and other intermediates into the digital journey of subscribers.
These are the advantages of PAN-PRAN- VPA(UPI):
1) Elimination of errors in the payment procedure
2) Compared to the old penny-drop system, which relied on fuzzy logic of name matching, NPCI's response, binary & simplified viz. Active/Inactive, simplifies the due diligence procedure.
3) PAN seeding in PRAN and Bank Account Matching
4) Successful and prompt processing of the subscriber's withdrawal request from the bank account in which they are joint holders.
What it does
Using the PAN-PRAN-VPA (UPI) and NPCI Framework, bank account verification and Name/PAN matching are performed.
1. The NPCI network supports PAN and VPA (UPI), and PAN is linked to bank accounts.
2. The User PAN, Account number, and IFSC (Bank code of the Bank given by the Subscriber) are sent as a request to NPCI in order to determine whether the Account number is associated with the User PAN in the Bank.
3. NPCI delivers the return result as Y and the account holder name in the bank if the account number and PAN are linked in the bank. Additionally, it provides the UPI ID (if applicable), account type, and status of the bank account (Active/Inactive).
4. If the account number and PAN are not linked in the bank, NPCI returns N with no subscriber information
5. This method is more powerful than the penny-drop procedure, which depends on fuzzy logic for name matching, because it returns value in binary (active/inactive).
6. The facility is heavily utilised by MFs, the insurance industry, and NBFCs for onboarding and changing Bank mandates. MFs use this tool to validate
third-party investment.
7. The following are benefits of employing PAN and VPA (UPI) for bank account authentication:
a. Quick and efficient answer.
b. Operates even if the Subscriber is the second or third account holder (penny drop mechanism returns only the first holder name).
c. Removing problems caused by larger names since the penny-drop procedure occasionally yields incomplete or condensed names.
d. More straightforward and logical technique compared to penny-drop, which employs fuzzy logic for name matching. 
8. Challenge: The customer's PAN is not current in the bank's records or is invalid in the bank record, which is the cause of the PRAN-PAN-UPI rejection. 
Other actions
Penny Drop method for Instant Bank Account Verification was activated. For the benefit of Subscribers and Stakeholders, please refer to Circular No.
PFRDA/2021/21/SUP-NPST/2, dated July 20, 2021. According to the PFRDA circular, the procedure "had greatly decreased the returns of cash due to inaccurate bank account details, improved turnaround time, and functioned as an extra due diligence technique to verify beneficiaries' credentials while processing their withdrawal claims."



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Changes in Our Business Model
25th Sept 2020
Greetings from Moneylife Advisory Services
Between financial years 2019-21, SEBI has come up with extensive changes to investor advisor regulations. On Sep 23, 2020, SEBI had issued new additional guidelines. This comes just two months after extensive changes announced in July 2020. Earlier, in December 2019 there was an ad hoc circular
As a result of these changes, IAs, cannot accept fees through credit cards, will have to sign a 26-clause investor agreement, have to maintain physical record written & signed by client, telephone recording, emails, SMS messages and any other legally verifiable record for five years. IAs were already asked to record the suitability and rationale for every piece of advice given, sign them and store them for five years.
While these extensive and frequent changes, designed to strengthen the conduct of IAs are well-meaning, these have sharply increased compliance efforts and cost. We, being online advisors, find many of changes harder to implement, compared to advisors working in the physical space. We will have to have an army of advisors, administrative and tech staff to be compliant. If we do this, we will have to divert money to these areas and the cost of our service will double. We want to remain the least-cost service in the market to benefit more and more people. In the circumstances, we are forced to change our business model from “advisory” to “research”. This will mean the following:
What remains the same:
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What changes:
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Over the next few weeks our site and our communication to you will reflect these and other additional changes.
We feel this will not affect you much in terms of what really matters in investing: knowing what to buy and when to buy. This is our edge and it will still be available to you.
Debashis Basu