Atal Pension Yojana: What will happen in case of continuous default?

Atal Pension Yojana (APY) is a pension scheme for the citizens of India focused on workers in the unorganized sector. Under APY, a guaranteed minimum pension of Rs 1,000 or 2,000 or 3000 or 4000 or 5000 per month at the age of 60 years will be guaranteed depending on the contribution by the subscribers.

Any citizen of India can join the APY scheme. The eligibility criteria for the scheme are here:

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1. The age of the customer should be between 18 to 40 years

2. The person should have a savings bank account with the post office/savings bank

If you already have subscribed to the scheme and is making default, then here is something you need to know.

As per the information provided the government, customers should keep sufficient amount in their Savings Bank Accounts/Post Office Savings Bank Account to avoid any overdue interest towards due date delayed contribution. Monthly / quarterly / half yearly contribution can be deposited in the Savings Bank Account / Post Office Savings Bank Account on the 1st of the month / quarter / half yearly.  

Although, If there is an insufficient balance in the customer's savings bank account/post office savings bank account on the last day of the first month/last day of the first quarter/first half of the first half, it will be treated as a default and will be transferred to the next month with overdue interest for delayed contribution.

Banks are to charge Re 1 per month for every delayed monthly contribution of Rs 100 for each delayed monthly contribution. Overdue interest for delayed contribution for quarterly/half yearly mode of contribution will be recovered.

The amount of outstanding interest collected will remain as part of the pension corpus of the subscriber. More than one monthly/quarterly/half yearly contribution can be taken subject to availability of funds.

In all cases, the contribution, if any, can be credited along with the overdue amount. This will be an internal process of the bank. As per the information provided the amount due will be recovered as per the funds available in the account.

Maintenance charges and other related charges will be deducted from the customer's account on a periodic basis. For customers who have availed Government co-contribution, the amount in the account shall be treated as zero when the amount equals to maintenance charges, fees and overdue interest on deducting from the subscriber corpus and Government co-contribution account and hence Net fund becomes zero. In this case the co-contribution of the government will be given back to the government.