Banks to float own pension funds

THE PENSION FUND Regulatory and Development Authority (PFRDA) has approved a new framework allowing Scheduled Commercial Banks (SCBs) to independently set up pension funds for managing the National Pension System (NPS), a move aimed at strengthening India's pension ecosystem.

- FE BUREAU

The move is expected to enhance competition, deepen institutional participation and better safeguard subscriber interests, the pension regulator said.

The proposed framework seeks to ease regulatory constraints that have so far limited banks' participation in pension fund management. It introduces clearly defined eligibility criteria based on net worth, market capitalisation and overall prudential soundness, aligned with norms prescribed by the Reserve Bank of India (RBI).This is intended to ensure that only well-capitalised and systemically robust banks are permitted to sponsor pension funds.