Banks Asked to Nudge APY Subscribers Towards Higher Pension Plans

New Delhi: Financial services secretary M Nagaraju has appealed to financial institutions, especially banks, to guide individuals towards higher retirement brackets as their income increases. The flagship social security scheme, Atal Pension Yojana (APY), witnessed gross enrollments crossing the 9-crore mark and a record 1.35 crore new subscribers were added in FY26.

“Amidst this remarkable progress, I must draw your attention to the critical concern that there is a huge enrollment rush in the Rs 1,000 monthly pension bracket,” he said while addressing the Atal Pension Yojana Annual Celebration Program organized by PFRDA here.

“As we celebrate our registration figures, we must ask ourselves the question: Can R1,000 per month provide adequate protection to our subscribers 20 or 30 years from now? This concentration suggests that our advice at the point of registration needs to be further strengthened. Our banking partners must actively guide subscribers to choose a functional mode that truly reflects their future needs and current affordability,” he said.

Nagaraju also said that banks should continue to develop new ways to communicate the benefits of retirement and ensure that every citizen, regardless of literacy level, understands that it is not just a savings plan but also an assured responsibility for their success. “APY journey is supported by institutions, especially State Bank of India, which has achieved a historic achievement of 2 crore subscribers.” he said.

To achieve this, APY outlined some focus areas for banks and other financial institutions that assist their subscribers. “Banking partners should prioritize consistency and continuity, focusing on making regular contributions and turning a registered account into lifetime security,” he said.

Secondly, he said that there is a huge untapped potential in urban centers. “I implore our private sector banks in particular to fully activate city banks to reach out to the informal workforce, street vendors, delivery partners and domestic workers who fill our city accounts but lack the level of security,” he said.

Meanwhile, PFRDA chairman S Ramann also said that the department of financial services (DFS) is trying to re-examine the APY scheme to see if a higher pension can be provided. “Subscribers have given feedback that the cap guarantee of Rs 5,000 per month under APY may not be sufficient after 15 or 20 years,” he said.