NRIs can invest in National Pension System : PFRDA

In Banking and Finance
July 22, 2015

Pension Fund Regulatory and Development Authority’s (PFRDA) Chairman Hemant Contractor has announced that Non-resident Indians (NRIs) can invest in National Pension System (NPS) to get a social security cover. RBI has communicated it to PFRDA that NRIs are now eligible to make such investments, however, the Central Government will come out with a clarification on the Foreign Exchange Management Act (FEMA) guidelines.

Highlighting the importance of NPS scheme for NRIs, he said such residents especially living in the Middle-East don’t have any mandatory social security benefit. This window would provide NRIs an opportunity to save money for their old age, he said adding that they would also enjoy the tax break as prescribed. The current corpus under the National Pension System is Rs 91,000 crore.

What is NRI, PIO,and OCI

NRI – Non-Resident Indians
PIO – Person of Indian Origin
OCI – Overseas Citizen of India
A Non-Resident Indian (NRI) is a citizen of India who holds an Indian passport and has temporarily emigrated to another country for six months or more for work, residence or any other purpose.
A Person of Indian Origin (PIO) is a citizen of any other country but whose ancestors were Indian nationals at least four generations away. A PIO card is issued to PIOs other than Bangladeshi and Pakistani nationals with Indian origins, holding a foreign passport.
Persons of Indian Origin (PIO) of certain categories who migrated from India and acquired citizenship of a foreign country, other than Pakistan and Bangladesh, are eligible to be granted an OCI as long as their home countries allow dual citizenship in some form or the other under their local laws