PFRDA amends trustee bank and CRA regulations for subscriber protection, enhancing ease of doing business

Pension regulator PFRDA has amended its Trustee Bank (TB) and Central Recordkeeping Agency (CRA) Regulations as part of its overall effort at ensuring subscriber protection and enhancing the ease of doing business in the NPS ecosystem. 

The latest amendments, among othes, introduced the concept of ‘fit and proper’ criteria for CRA and its key personnel. 

A trustee bank is an intermediary that is responsible for the day-to-day flow of funds and banking facilities in accordance with the guidelines and directions issued by the Pension Fund Regulatory and Development Authority (PFRDA) under the National Pension System (NPS).

CRAs are responsible for centralised recordkeeping, administration, and customer service functions for all NPS subscribers. Currently, there are three licensed CRAs in the country. 

The latest amendments to the trustee bank regulations seek to simplify and strengthen the provisions related to the implementation of a fraud prevention and mitigation policy, compensation to the subscriber, invitation of applications for new registration, and surrender of certificates of registration.

On the other hand, amendments to CRA Regulations seek to simplify and strengthen the provisions related to the governance of CRA in line with the Companies Act, 2013 and enhance the disclosure of information by CRA. 

Some of the notable amendments to CRA regulations include the implementation of a fraud prevention and mitigation policy by CRA to protect the interests of subscribers and the inclusion of a certificate by the CEO in the annual report with respect to the adequacy and effectiveness of internal controls, compliance, and audit processes.