Pension Fund Regulatory and Development Authority (PFRDA) has approved a framework to permit scheduled commercial banks to independently set up pension funds and become sponsors managing assets under the National Pension System (NPS).
Currently, pension funds under NPS are sponsored by life insurance and mutual fund companies. There are 10 pension fund companies managing NPS assets worth ₹15.95 lakh crore for 2.1 crore subscribers as of November 30, 2025.
“The proposed framework seeks to address existing regulatory constraints that had limited bank participation till now. By introducing a clearly defined eligibility criteria based on net worth, market capitalisation and prudential soundness in line with RBI norms, it will ensure that only well-capitalised and systemically robust banks are permitted to sponsor pension funds,” said a statement from the finance ministry on Thursday, adding that detailed criteria will be notified soon.
PFRDA has also appointed three new trustees on its board — former SBI chairman Dinesh Khara, Swati Anil Kulkarni, former executive vice-president of UTI AMC and Arvind Gupta, co-founder and head, Digital India Foundation and member of the national venture capital investment committee under the fund of funds scheme managed by SIDBI. Khara has been designated as the chairperson of the NPS Trust board.
PFRDA has also revised the investment management fees for pension funds — a tiered annual charge for managing pension funds. It is currently charged based on specific slabs of AUM and ranges between 0.03 per cent to 0.09 per cent. Both slabs and rates have been revised for the non-government sector, with the new rates ranging between 0.04 per cent and 0.12 per cent.
“In order to align with evolving realities, aspirations of the public, international benchmarks and the objective of expanding coverage across corporate, retail and gig-economy segments, PFRDA has revised the Investment Management Fee (IMF) structure for Pension Funds to safeguard subscriber interests with effect from April 1, 2026,” the finance ministry said.
