Banks Asked to Nudge APY Subscribers Towards Higher Pension Plans

New Delhi: Financial services secretary M Nagaraju called for financial institutions, particularly banks, to nudge individuals toward higher pension slabs as their incomes grow. The flagship social security scheme, Atal Pension Yojana (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 enrollment 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.

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. “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,” 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.

Meanwhile, PFRDA chairman S Ramann also 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.