RBI allows NRIs to join India’s pension scheme

Mumbai: To enable Indians living abroad to access old age income security, the Reserve Bank (RBI) on Thursday allowed non-resident Indians (NRIs) to subscribe to the National Pension System (NPS). “It has now been decided, in consultation with the Government, to enable National Pension System (NPS) as an investment option for NRIs under FEMA, 1999,” Reserve Bank said in a notification here on Wednesday.

 

NRIs may subscribe to the NPS governed and administered by the Pension Fund Regulatory and Development Authority (PFRDA), provided such subscriptions are made through normal banking channels and the person is eligible to invest as per the provisions of the PFRDA Act, it said. 

 

The subscription amounts shall be paid by the NRIs either by inward remittance through normal banking channels or out of funds held in their NRE/FCNR/NRO account. 

The Reserve Bank, however, said that there will be no restriction on repatriation of the annuity/ accumulated savings. NPS was launched on January 1, 2004 with the objective of providing retirement income to all the citizens. 

 

NPS aims to institute pension reforms and to inculcate the habit of saving for retirement amongst the citizens. Initially, the National Pension System was introduced for the new Government recruits (except armed forces).  With effect from May 1, 2009, the scheme has been provided for all citizens of the country, including the unorganised sector workers, on voluntary basis.