RBI permits NBFCs to offer NPS

On July 6,2017, the Reserve Bank of India (RBI) announces that the large non-banking financial companies (NBFC) were allowed to offer the new pension scheme (NPS) via point of presence services.

All the non-banking financial companies who are with an asset size of Rs 500 crore and above and also in the previous financial year who had reported net profit will be allowed to offer non pension scheme after registration with Pension Fund Regulatory and Development Authority.

This is a great move taken by the central bank as earlier NBFC were prohibited from providing such services under National Pension Scheme. However, it is needed as per RBI norms that NBFCs should deposit  the subscription collected from the public through this route on the day of collection itself with the trustee bank.

The RBI also mentioned that NBFCs who were failing to follow the norms set by the pension regulators may lead to the cancellation of the approval to render such services.