The National Securities Depository Ltd (NSDL) is a national level organisation responsible for processing securities in a dematerialised form. Recently, it has established a Central Record keeping Agency (CRA) for the New Pension System (NPS) announced by union finance minister Chidambaram on August 29, 2008.

Under the NPS, each government employee will open an account with the CRA, which will be identified through a unique Permanent Retirement Account Number (PRAN). Under this system, deductions will be made from the employee’s salary on a monthly basis and an equal amount of contribution will be made by the government. Till now, only central government employees were covered under the pension scheme. However, after the recent announcement by the FM, state government employees and virtually all citizens are eligible to buy pension schemes. As the NPS gains momentum, more and more states are expected to join the scheme. Chattisgarh is the first state to register for the NPS.

"The NSDL handles about Rs forty-five lakh crore, an amount equivalent to approximately 85 to 90 percent of the country’s GDP. As of now, the number of accounts of the central government employees is close to four lakhs," said T Koshy, executive director, NSDL.

The CRA will strive for a seamless and error-free system enabling the subscriber (typically govt employees and people from the unorganised sector) to have a nationwide access to the system. Employees can log on to http://www.npscra.nsdl.co.in/ and access their personal information and pension profile.

NPSCAN: Single interface to all parties of the NPS

NPSCAN is a Web-based 'NPS Contribution Accounting Network' developed by the CRA to maintain accounts of government subscribers. Pay and Accounts officers (PAO) can access NPSCAN for uploading subscriber contribution files, updating various types of subscriber requests such as change in personal details, change in scheme preference, switch, withdrawal etc. Nodal offices can access NPSCAN with the user ID and I-PIN allotted by CRA. Fund managers will also be able to access NPSCAN for managing daily data updates.

"The Internet will be the only interface required to access the information on the New Pension Scheme (NPS) for users, fund managers and the CRA given proper authentications are in place," said Dharmesh Parekh, VP – IT, NSDL. The infrastructure for the NPSCAN initiative will be similar to the already existing one of the Tax Information Network (a repository of nationwide tax related information that has been established by NSDL on behalf of the Income Tax department).

NSDL to provide software to attach data files

Users at PAO can feed in data in utilities given to them to create bulk files in their local machines. These file can then be uploaded to the site. In case the user wants to enter individual information regarding filing deductions or if he wants to switch over from the current fund manager, it can be done online after necessary authentication.

The CRA has a three-tier architecture – the database (DB2), application server (Web sphere) and Web server. The system is scalable horizontally and vertically negating any need for re-engineering for handling a volume spurt. "We can put in additional pieces of hardware to process incremental transactions," said Parekh.

"We are using Web technologies and the application is built by us. It is a J2EE based application hosted on WebSphere. Currently, the CRA has ten IBM servers," said Parekh.

The pervasiveness of the Internet will help a large number of users to access and upload information on the portal. The CRA will also be able to manage the large database of user accounts efficiently.

Multi pronged strategy for security

"As NSDL handles a really huge corpus as mentioned earlier, it prompts us to be always on our toes on the security front," said Koshy. Primarily, the organisation is ISO 27001 compliant, which necessitates constant audition of all processes and practices. The security practice is a mix of measures at the hardware, software and policy levels.

The historic data and user information will be migrated to the NPS portal by early next year.