The detailed criteria will be notified separately and will apply to both new and existing pension funds said the PFRDA in a statement
Mumbai: India’s pension fund regulator--The Pension Fund Regulatory and Development Authority (PFRDA) on Thursday announced a new framework that allows banks to independently set up pension funds to manage the monies under the National Pension Scheme. The proposed framework seeks to address the existing regulatory constraints that had limited bank participation till now, while introducing clearly defined eligibility criteria based on net worth, market capitalisation and prudential soundness in line with RBI norms, to ensure that only well-capitalised and systemically robust banks are permitted to sponsor pension funds.
The detailed criteria will be notified separately and will apply to both new and existing pension funds said the PFRDA in a statement. At present there are 10 registered pension fund managers with the PFRDA that manage Rs 16 lakh crore of combined assets Under Management (AUM) of the central government's two flagship retirement saving schemes -- National Pension System (NPS) and Atal Pension Yojana (APY).
Currently, banks’ life insurance subsidiaries or their asset management subsidiaries have floated pension funds such as SBI Pension Fund, ICICI Prudential Pension Fund, Kotak Mahindra Pension Fund and HDFC Pension Management. The existing norms allow banks to serve as points of presence, handling subscriber registrations, contributions, and other system services.
In another major development, PFRDA has revised the Investment Management Fee (IMF) structure for Pension Funds, effective April 1, 2026. The move seeks to align India’s pension cost structures with global benchmarks while protecting subscriber interests. The new IMF introduces a slab-based, differentiated fee regime for Government and Non-government sector subscribers. While government sector rates remain unchanged, the non-government sector will see a graded fee structure: For AUM upto Rs 25000 crore, the IMF rate will be 0.12 per cent, for AUM of Rs 25000-50000 crore, the IMF will be 0.08 per cent, the fee would be 0.06 per cent for AUM of 50,000 to Rs 1.5 lakh crore and falls to 0.04 per cent for AUM above Rs 1.5 lakh crore.
Additionally, three new trustees have been appointed to the NPS Trust Board, including Dinesh Kumar Khara, a former chairman of the country's largest lender, State Bank of India.
