Non-Resident Indians (“NRI”) will now be permitted to invest in the National Pension System (“NPS”) as an investment option under the Foreign Exchange Management Act, 1999. By a circular dated October 29, 2015 issued by the RBI, NRIs are allowed to access old age income security by subscribing to the NPS, which is governed and administered by the Pension Fund Regulatory and Development Authority (“PFRDA”). The NRI must be eligible to invest as per the provisions of the PFRDA Act, 2013 and the subscription amount is to be paid either by way of inward remittance through normal banking channels or out funds held in their Non-Resident External/Foreign Currency Non-Resident/Non-Resident Ordinary Rupee account(s). Further, there will no restriction on repatriation of the annuity/accumulated savings.
In addition to various initiatives taken by the Central Government to increase foreign investment in the insurance and pension sector in India, this is another welcome move to redirect the income of NRIs to enhance foreign exchange reserves in the country.