With an aim to boost NPS, regulator allows banks to set up own pension funds

Group 1 - The Pension Fund Regulatory and Development Authority (PFRDA) has approved a framework allowing scheduled commercial banks to directly establish pension funds for managing the National Pension System (NPS), which is expected to enhance distribution and competition among fund managers [1][4] - The new framework aims to eliminate regulatory constraints that previously limited bank participation in the pension sector, introducing eligibility criteria based on net worth, market capitalization, and prudential soundness in accordance with Reserve Bank of India's standards [2][3] - The PFRDA anticipates that these reforms will lead to a more competitive and well-governed pension ecosystem, improving long-term retirement outcomes and enhancing old-age income security for subscribers [5] Group 2 - The investment management fee (IMF) structure for pension funds will be revised to better align with public aspirations and international benchmarks, effective from April 1, 2026, to protect subscriber interests [6] - The revised fee structure will introduce differentiated rates for government and non-government sector subscribers, applicable to schemes under the multiple scheme framework (MSF) [7] Group 3 - The finance ministry has appointed three new trustees to the NPS Trust board, including Dinesh Kumar Khara as chairperson, which reflects a strategic move to strengthen governance within the pension sector [8]