RBI opens up National Pension System to NRIs

Mumbai: The Reserve Bank of India on Thursday said that non-resident Indians (NRIs) would be allowed to subscribe to the national pension system. In a notification, the central bank said the decision has been taken to provide old age income security to NRIs.

“With a view to enabling NRIs’ access to old age income security, it has now been decided, in consultation with the Government of India, to enable National Pension System (NPS) as an investment option for NRIs under FEMA (foreign exchange management act) 1999,” said the RBI.

The central bank added that NRIs can subscribe to the NPS administered by the Pension Fund Regulatory and Development Authority (PFRDA). Such subscriptions have to be made through normal banking challenges, provided the person is eligible to invest as per provisions of the PFRDA Act, it said.

NRIs can pay the subscription amount either through an inward remittance or out of funds held in accounts intended for non-residents such as a non-resident external (NRE) account or a foreign currency non resident (FCNR) account.

In July, Mint had reported that the PFRDA wanted NRIs to be allowed to investment in the NPS. That, along with the government’s decision to allow an extra Rs.50,000 deduction in income tax for investments made in NPS, were seen as ways to help increase the subscriber base of the NPS.

At present, there are 9.6 million NPS subscribers with the total assets under management at almost Rs.88,000 crore. But a majority of the assets are under the mandatory government sector scheme.

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