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To attract more non-resident Indians (NRIs) into the National Pension System’s fold, pension regulator PFRDA plans to launch a ‘non-repatriable’ scheme.
The scheme is expected to make it easier for NRIs to subscribe to the NPS as it would involve lesser procedures and do away with some existing restrictions of the Reserve Bank of India (RBI).
“NRI investments in NPS are not taking off well. We are looking at other options like allowing them to put money in NPS on a non-repatriable basis,” Hemant Contractor, Chairman, Pension Fund Regulatory and Development Authority, told BuisnessLine . The PFRDA has written to the RBI seeking the latter’s approval for launch of a separate NPS scheme for NRIs on non-repatriable basis, he said.
“As things stand today, NRIs can invest only in NPS on a repatriable basis. In case of repatriability, there are certain restrictions. So, we have written to the RBI to allow us to launch a non-repatriable scheme,” Contractor said.
The RBI had, in October last year, allowed NRIs to subscribe to the NPS and also said there will be no restrictions on repatriation of the annuity/accumulated savings.
The subscription amounts have to be paid either by inward remittance through normal banking channels or out of funds held in their Non-Resident (External) Rupee / Foreign Currency Non-Resident (Bank) / Non-Resident Ordinary Rupee Account, the RBI had said.
The RBI move was significant as it not only enabled NRIs access old age income security but also provided them with another investment option under the Foreign Exchange Management Act, 1999.
According to the Ministry of External Affairs, India has the second-largest diaspora in the world, at 29 million people living abroad.
Of this, 7.22 million people live in the Gulf countries. The Gulf Cooperation Council, comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE, has the largest emigrated India population.
The other main destinations for NRIs are Australia, Canada, Singapore, South Africa, the UK and the US.
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