India allows banks to sponsor pension funds under NPS

MUMBAI, Jan 1 (Reuters): India's pension fund regulator has allowed banks to sponsor pension funds

that will manage monies under the National Pension System (NPS), in a bid to bolster competition in the sector.

The Pension Fund Regulatory and Development Authority (PFRDA), which oversees assets worth more than

$177 billion, said in a

statement on Wednesday that it had given in-principle approval for banks to

independently set up pension funds to manage the

NPS, subject to eligibility norms aligned with the Reserve Bank of India's guidelines.

Banks will have to meet eligibility criteria linked to net worth, market capitalisation, and prudential soundness, it added.

Currently, banks serve as points of presence, handling subscriber registrations, contributions, and other system services. Some existing pension funds have ties to financial institutions, including banks.

At present, there are 10 registered pension funds with the PFRDA.