OCI card-holders can register for Indian pension
DUBAI — The Indian government has announced that overseas citizens of India (OCI) card-holders can now subscribe to the National Pension System (NPS).
A proposal for the inclusion of OCI card-holders had been under consideration for some time but on Wednesday, the Consulate-General of India in Dubai confirmed that it has been approved.
“It has now been decided that OCI card-holders can also subscribe to the NPS in parity with NRIs. The Reserve Bank of India (RBI) will suitably amend/notify article 20(R) of Foreign Exchange Management Act (FEMA) accordingly,” the consulate said in a statement.
The NPS, which is administered and regulated by the country’s Pension Fund Regulatory and Development Authority (PFRDA), was launched on January 1, 2004, with the objective of providing retirement income to Indian citizens. Taking effect on May 1, 2009, the NPS facility had been extended to all citizens of the country. Now, it has been opened to OCIs, covering over 8,000 expats in the UAE.
Talking about the advantage of joining the NPS, acting consul-general and head of chancery Neeraj Agrawal told Khaleej Times: “This is a very flexible scheme and offers a range of investment options and pension fund managers for planning your investments.
“Individuals can switch over from one investment option to another or from one fund manager to another, subject to certain regulatory restrictions, and the returns totally depend on the market conditions.” Registration can be done in almost all Indian banks, Agrawal said.
“This can also be done online or if you have a de-mat account. The only condition is that you should have a KYC-compliant account with the bank. With that, one can access the NPS scheme with just a click of a button.”
Upon opening an account with the NPS, the subscriber is allotted a permanent retirement account
number (PRAN), which is a unique combination of digits that the individual would use throughout his lifetime. Initially, one has to deposit a minimum of Rs500 per year.
The scheme is structured into two tiers, Agrawal said.
“Tier-I account is the non-withdrawable, permanent retirement account into which the accumulations are deposited and invested as per the option of the subscriber. And the Tier-II account, which is a voluntary withdrawable account that can be granted only when there is an active Tier I account in the name of the subscriber. Withdrawals are permitted from this account as per the needs of the subscriber.”
The pension scheme is like a mutual fund “with a very low, nominal fund management fee and with one of the best fund managers”.
“You can choose the percentage of equity and debt as per your requirement.”