Pension regulator PFRDA plans to accelerate the expansion of the National Pension System by leveraging banks’ large customer networks and integrating NPS enrolment with the UPI ecosystem. The regulator estimates that NPS assets under management could reach around ₹100 lakh crore by 2040.
Mumbai, November 4 — The Pension Fund Regulatory and Development Authority (PFRDA) is looking to significantly expand the National Pension System (NPS) by using banks and India’s Unified Payments Interface (UPI) ecosystem to attract more subscribers.
PFRDA Chairman S Ramann said the regulator estimates that the pension system could have around ₹100 lakh crore in assets under management (AUM) by 2040, supported by India’s growing economy and increasing need for long-term savings.
Speaking at the Tatkal NPS: Advancing Digital Pension Inclusion conference, Ramann said PFRDA wants to accelerate growth beyond the organic expansion of India’s pension market.
NPS enrolment through UPI
A key part of the strategy is to make NPS account opening easier through UPI and existing digital banking platforms.
The proposed mechanism could allow customers to open pension accounts using basic information such as their mobile number and date of birth, with minimal additional intervention from banks.
Ramann said the approach could effectively bring the customer acquisition cost for banks to zero, as existing digital infrastructure would be used to enrol NPS subscribers.
PFRDA wants banks to become a major NPS distribution channel because of their extensive customer base and established digital networks.
The regulator is also working to make pension distribution more attractive for intermediaries. According to Ramann, revenues of the top 10 Points of Presence (POPs) have increased four to five times following changes to the commission structure introduced from January 1.
More investment choices for NPS subscribers
PFRDA is also moving towards differentiated investment schemes and asset-allocation options, recognising that government employees, informal-sector workers and financially sophisticated investors may have different requirements.
Ramann said investors with sufficient financial understanding could be offered the option of up to 100% exposure to equity-oriented schemes.
The regulator is also considering expanding pension investments into unlisted equity, project finance, Greenfield and Brownfield projects, in addition to existing exposure to REITs and InvITs.
The broader objective is to channel more long-term pension savings towards growth assets while providing subscribers with investment options suited to their risk profiles.
PFRDA believes expanding pension coverage is increasingly important because people are living longer and need adequate savings to support themselves after retirement.
