Banks need to push APY subscribers toward higher pension slab keeping in mind future needs: DFS Secy

Flagging concerns over the high concentration of Atal Pension Yojana (APY) subscribers in the minimum slab of Rs 1,000, Financial Services Secretary M Nagaraju called on financial institutions, particularly banks, to nudge individuals toward higher pension slabs as their incomes grow.

The flagship social security scheme, APY, has witnessed gross enrolments crossing the 9 crore mark, and in FY26, a record 1.35 crore new subscribers were added.

''Amid this remarkable progress, I must call your attention to the critical concern that there is an overwhelming concentration of enrolments in the Rs 1,000 monthly pension slab,'' he said, while addressing an Atal Pension Yojana Annual Felicitation Programme organised by PFRDA here.

''While we celebrate our enrolment numbers, we must ask ourselves: would Rs 1,000 per month provide adequate protection to our subscribers 20 or 30 years from now? This concentration suggests that our counselling at the point of enrolment needs more strengthening. Our banking partners must actively guide subscribers to choose a functional mode that truly reflects their future needs and current affordability,'' he said.

To ensure this, he listed some focus areas for banks and other financial institutions that help onboard APY subscribers.

Banking partners must prioritise consistency and continuity, with focus on ensuring regular contributions, turning a registered account into lifelong security, he said.

Secondly, he said, there is a vast untapped potential in urban centres.

''I implore our private sector banks, in particular, to fully activate their urban banks to reach the informal workforce, the street vendors, the delivery partners, and the domestic helpers who fill our city accounts, but lack the safety level,'' he said.

Nagaraju also said banks must continue to innovate ways to communicate the benefits of a pension, and ensure that every citizen, regardless of their literacy level, understands that this is not just a savings plan but a guaranteed liability for their success.

He further said that the APY journey has been championed by institutions, most notably by the State Bank of India, which has achieved the historic feat of 2 crores subscribers.

''I also want to express my deepest appreciation to our public sector banks, regional rural banks and our private banks,'' he said.

Speaking on the occassion, PFRDA Chairman S Ramann said the Department of Financial Services (DFS) is looking at re-examining the APY scheme if a higher pension can be provided.

Subscribers have provided feedback that an upper guarantee of Rs 5,000 per month under APY may not be adequate after 15 or 20 years, he said.

PFRDA would engage with the DFS on the matter and provide a detailed report on this, Ramann said, adding that the scheme has a government component, so many things have to be looked at.

It is too premature to arrive at any conclusion at this stage, he added.

During the event, the secretary felicitated many banks which demonstrated outstanding commitment towards APY's success. Among the banks which got award included State Bank of India, Union Bank of India, UCO Bank and Punjab & Sind Bank.

Atal Pension Yojana was launched in May, 2015, with the objective of providing old-age income security to workers in the unorganised sector. It offers a guaranteed minimum pension of Rs 1,000 to Rs 5,000 per month starting at age 60, based on contributions.

APY has been implemented comprehensively across the country, covering all states and Union Territories, with the total enrolments having crossed 9.10 crore as of May 18, 2026.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)