RBI opens channel for NRIs to subscribe to National Pension System

To enable Indians living abroad to access old age income security, Reserve Bank has allowed non-resident Indians (NRIs) to subscribe to the National Pension System (NPS).

''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, 1999''. RBI said in a notification on Thursday.

''Accordingly, 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,'' RBI said in a release.

An NRI can pay the subscription amounts either by inward remittance through normal banking channels or out of funds held in their NRE / FCNR / NRO account.

The RBI, however, said there will be no restriction on repatriation of the annuity / accumulated savings.

NPS was launched on 1 January 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, NPS was introduced for the new government recruits (except armed forces). With effect from 1 May 2009, NPS has been provided for all citizens of the country, including the unorganised sector workers, on voluntary basis.