PFRDA Simplifies NPS Account Opening with OTP-Based Authentication

The Pension Fund Regulatory and Development Authority (PFRDA) has made it easier for individuals to open National Pension System (NPS) accounts by enabling OTP-based authentication for paperless onboarding. The move is aimed at simplifying the registration process while improving ease of access for subscribers.

What Has Changed in the NPS Onboarding Process?

Earlier, PFRDA had allowed paperless NPS account opening using e-signatures or OTP-based verification under guidelines issued in June 2020. Under the revised framework, applicants can now authenticate their online NPS registration either through an e-sign or an OTP sent to their registered mobile number.

This update ensures that the entire onboarding process can be completed digitally without the need for physical documents. All mandatory declarations and consent requirements must be completed at the end of the online registration journey using the chosen authentication method.

How Will This Affect Applicants and Service Providers?

For applicants, the change means faster and more convenient NPS account opening. OTP-based verification reduces dependency on additional digital signature tools and allows users to complete the process using their mobile phones.

PFRDA has directed Central Recordkeeping Agencies (CRAs) and Points of Presence (POPs) to update their systems and align their onboarding processes with the revised guidelines. This is expected to improve consistency and efficiency across all NPS service platforms.

Steps to Strengthen the Pension Ecosystem

In another key development, PFRDA has permitted scheduled commercial banks to independently set up pension funds to manage NPS. This decision, taken on January 1, 2026, is aimed at strengthening the pension ecosystem, increasing competition, and safeguarding subscriber interests.

Currently, there are 10 pension funds registered with the regulator. With banks allowed to enter this space, subscribers may benefit from more choices and potentially improved fund management standards.

Growing Scale of the National Pension System

The National Pension System continues to expand rapidly. As of August 31, 2025, NPS had over 9 crore subscribers and assets under management of ₹15.5 lakh crore. The scheme was introduced by the Central Government to help individuals build a retirement corpus through systematic, market-linked savings.

NPS is regulated and administered by PFRDA under the PFRDA Act, 2013. It is a voluntary, portable, and flexible pension scheme designed to support long-term retirement planning while offering tax benefits.

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Conclusion

The introduction of OTP-based authentication marks an important step in making NPS more accessible and user-friendly. Along with allowing banks to set up pension funds, the move reflects PFRDA’s focus on digital adoption, competition, and subscriber convenience. These changes are likely to support wider participation in NPS and strengthen retirement planning in India.

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