New Delhi: Non-resident Indians (NRIs) can invest in National Pension System (NPS) to get a social security cover, pension regulator PFRDA's chairman Hemant Contractor said on Wednesday.
While RBI has communicated to PFRDA about NRIs being eligible to make such investments, the government will shortly come out with a clarification on Foreign Exchange Management Act (FEMA) guidelines to facilitate non-resident Indians to invest in National Pension System (NPS), he said.
"There was some ambiguity about whether to add NPS as eligible investment by NRI. So, we took up the matter with RBI and very recently they have given this clarification that NPS like insurance and mutual fund could also be eligible investment for NRIs," Contractor said at an event organised by PFRDA here.
"...the government will shortly be coming out with clarification to that effect in the FEMA guidelines" he said.
Highlighting the importance of NPS scheme for Non-Resident Indians (NRIs), he said such residents especially living in the Middle-East are not having any mandatory social security benefit.
This window would provide NRIs to save money for their old age, he said adding that they would also enjoy the tax break as prescribed.
The Pension Fund Regulatory and Development Authority (PFRDA) is in talks with lenders such as SBI, HDFC Bank, Canara Bank, Indian Bank and several other south India-based banks to tap potential of NRIs.
"We have started talking to bankers about attracting NRIs to enroll for NPS scheme. We see NRIs as very attractive market for NPS. We would like to push for NPS for the NRIs," he said.
The move will also help to increase the subscriber base and expand the pension corpus in the private sector.
The current corpus under the National Pension System is Rs 91,000 crore.