NRIs can now invest in National pension Scheme (NPS) to Secure their retirement plans
Those Non Resident Indians who have been looking for options to have a social security cover in India would be happy to know that they can now invest in National Pension Scheme, without any hassle.
NRIs earn decent money abroad, in whichever country they live in and money is one factor that they are living away from their family and native place. When they make fortunes abroad, most of them want to be connected to their roots and invest in their native nation along with having a social security cover in their native country, which they can enjoy when they come back. Investment tools like NPS are something that attract these NRIs.
Ever since the news has come out in public by the RBI, it is not really sure about the FEMA (Foreign Exchange Management Act) guidelines, but it has stated clearly that NRIs can invest in NPS as an investment tool. This move comes to encourage Indians living abroad to invest more and more money in their native land.
For a long time now, there had been some ambiguity on whether NRIs would be allowed to invest in National Pension Scheme, however, with this new directive from RBI, the air has just been cleared. NPS is not the only investment tool that has been made available for Non Resident Indians. Earlier, mutual funds and insurance investments were open for NRIs and NPS would just add to the list.
The FEMA guideline is yet to come to light, however, we are sure that the RBI and FEMA would work something out to make this a reality for NRIs. This move would mostly benefit those NRIs who are living in Middle East countries and are not covered under any other social security cover or benefit.
NPS is an effective investment tool which becomes quite relevant when you grow old and pass your working age. With such pension scheme, the Indians are already enjoying a carefree old age after they have worked life long and saved what they can. Such benefit would now be a possibility for the Non-Resident Indians as well.
There would be several lenders in this new directive. The PFRDA would ensure that it loops within lenders like Indian Bank, Canara Bank, HDFC bank, SBI and other prominent financial institutions so that the right potential of NRIs can be tapped and brought back to the nation.
As a matter of fact, NRIs were eligible for investing in NPS ever since the pension scheme was launched. However, there had been ambiguity in the regulations of NRI investment to the scheme and this made NRIs stay away from it.
Now, with government’s and RBI’s commitment to clear the ambiguity, it would become quite easier for NRIs to enjoy the social security cover, more so for those living in countries where they are not covered under any other social security cover.
Last but not the least, this move from government would be coupled with its decision to allow an extra Rs 50,000 deduction against their taxation for income and this would certainly call for more and more NRI investors.