Dubai: To widen the ambit of investors in the National Pension Scheme (NPS) and also to provide social security, the Reserve Bank of India (RBI) on Thrusday said that Non-Resident Indians (NRIs) can contribute to the popular NPS.
“With a view to enabling NRIs’ access to old age income security, it has now been decided, in consultation with the Government of India, to enable National Pension Scheme (NPS) as an investment option for NRIs,” the RBI said in a statement posted on its webiste.
The subscription amounts can be paid by the NRIs through normal banking channels or from their funds held in NRE/FCNR/NRO accounts.
There will be no restriction on repatriation of the accumulated savings, the central bank said.
The scheme would open new doors for NRIs, especially the millions based in the Gulf, said experts.
Long-term investment
“NRI penetration for investments is quite low in the UAE. Since deposit rates are pretty low here, this opens up another avenue for NRIs to invest in long-term,” Preeti Bhambri, managing director at moneycamel.com, a personal finance and property portal based in Dubai said.
“This can be an easy option for the regular bank customers if they percieve it to be safe,” she added.
Under the NPS, the pension funds are invested in three separate asset classes depending upon the choice of investor ie equity, government securities and a range of fixed income instruments.
Minimum annual subscription under NPS is Rs6,000. During tax year 2013-14, the eight pension funds used for central government employees showed returns of between 8-14 per cent.
