Reserve bank of India has allowed Non-Resident Indians (NRIs) to subscribe the National Pension System (NPS) as an investment option under FEMA, 1999. Decision in this regard has been taken in consultation with the GOI.
- NRIs will get access to NPS which is governed and administered by the Pension Fund Regulatory and Development Authority (PFRDA).
Subscription Highlights
- How to get subscription – It will be made through normal banking channels and the person is eligible to invest as per the provisions of the PFRDA Act.
- How to pay subscription amount – It will be paid by the NRIs either by inward remittance through normal banking channels or out of funds held in their NRE/FCNR/NRO account.
- Restriction on annuity – There will be no restriction on repatriation of the annuity/ accumulated savings.
- Minimum annual subscription – It will be Rs 6,000 under NPS while allocation to equities is capped at 50% of investment.
- Subscription maturity – NPS investments mature when the investor turns 60.
If the amount is < Rs 2 lakh, the entire sum can be withdrawn.
If amount is > Rs 2 lakh the subscriber must put at least 40% of the corpus into an annuity to get a monthly pension.
About National Pension System (NPS)
NPS was launched on 1 January 2004 with the objective of providing retirement income to all the citizens.
- Aim – To institute pension reforms and to instil the habit of saving for retirement amongst the citizens
- Initially, NPS was introduced for the new Government recruits (except armed forces).
- On May 1, 2009, NPS has been extended to all citizens of the country on voluntary basis.
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