RBI allows NRIs to subscribe to National Pension System

The Reserve Bank of India (RBI) has allowed non-resident Indians (NRIs) to subscribe to the National Pension System (NPS) enabling them access old age income security.
RBI has taken this decision in consultation with Union Government under the Prime Minister Narendra Modi’s efforts to appease NRIs.
Key facts

• NPS will act as an investment option for NRIs under Foreign Exchange Management Act (FEMA), 1999.
• NRIs may subscribe to the NPS through normal banking channels and the person is eligible to invest as per the provisions of the PFRDA Act, 2013.
• NRIs should pay the subscription amounts of NPS either by inward remittance through normal banking channels or out of funds held in their NRE/NRO/FCNR account.
• No restriction will be imposed on repatriation of the annuity or accumulated savings of NPS.

About National Pension System (NPS)

• Governed and administered by the Pension Fund Regulatory and Development Authority (PFRDA).
• NPS was launched in 2004 and was initially introduced for the new Government recruits (except armed forces).
• NPS aims to institute pension reforms in the country and to inculcate the habit of saving for retirement amongst the citizens. Its objective is to provide retirement income to all the citizens.
• It was extended for all citizens of the country from 1 May 2009 including the unorganised sector workers on voluntary basis.

Month: Current Affairs - October, 2015