Who: Non-resident Indians (NRIs)
What: RBI allowed them to subscribe to National Pension System
When: 29 October 2015
Reserve Bank of India (RBI) on 29 October 2015 allowed non-resident Indians (NRIs) to subscribe to the National Pension System (NPS).
RBI took the decision in consultation with the Union Government to enable National Pension System (NPS) as an investment option for NRIs under Foreign Exchange Management Act (FEMA), 1999.
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.
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. There will be no restriction on repatriation of the annuity/ accumulated savings.
The decision is in accordance with the amendment to Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Ninth Amendment) Regulations, 2015 which was notified on 6 October 2015.
The directions were issued under section 10(4) and 11(1) of the Foreign Exchange Management Act, 1999.
About New Pension System
The National Pension System (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.