RBI opens National Pension System as investment option for NRIs

Keeping in view the enabling of Non-Resident Indian's (NRI) access to old age income security, the Reserve Bank of India (RBI), today opened up the NPS scheme for NRIs as an investment option. Experts say with this the scheme is expected to receive a wider audience.

Retirement planning is one of the important aspects of financial planning.NRIs may subscribe to the NPS governed and administered by the 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 biggest attraction of this offer is that there shall be no restriction on repatriation of the annuity/ accumulated savings.

According to the RBI notification, '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.' While speaking at the MorningStar Investment Conference 2015, the PFRDA chairman Hemant G Contractor had noted that pension coverage is woefully inadequate among Indians. "Lack of traditional forms of support (like joint family) in the present times is one of the reasons why pension scheme is of paramount importance," he added.