Non-resident Indians (NRIs) can now invest in the National Pension System (NPS) for a social security cover. With the RBI communicating to PFRDA about it, the government will shortly come out with a clarification on Foreign Exchange Management Act (FEMA) guidelines to facilitate NRIs to invest in the scehme.
Earlier, there was some ambiguity about whether the NRIs were eligible for the scheme or not. But after the RBI clarification in this regard, the decks have been cleared for the participation of NRIs. It will enable the NRIs to save money for their old age, apart from enjoying enjoy tax breaks. Incidentally, NRIs are alredy eligible to invest in insurance and mutual fund schemes in India.
The Pension Fund Regulatory and Development Authority (PFRDA) is talking to lenders like SBI, HDFC Bank, Canara Bank, Indian Bank and several other south India-based banks to tap the potential of NRIs. It sees the NRIs as a very attractive market for NPS and would like to push the NPS for them. The move will also help to increase the subscriber base and expand the pension corpus in the private sector, which currently stands at Rs. 91,000 crore.