NPS update: Pension funds can now invest in New Development Bank bonds

The move comes after approval from the Department of Economic Affairs, Ministry of Finance, and is aimed at broadening eligible investment instruments for pension funds while keeping existing risk norms intact.

What has changed?

Earlier, NPS investments in rupee bonds were limited to select global institutions such as the International Bank for Reconstruction and Development (IBRD), International Finance Corporation (IFC), and Asian Development Bank (ADB).

Now, NDB has also been added to the list of eligible issuers.

As per the circular, “Rupee Bonds issued by institutions of the International Bank for Reconstruction and Development, International Finance Corporation, Asian Development Bank and New Development Bank” are now included in the eligible investment universe.

What this means for your pension money

• More diversification options for pension funds

• Broader set of global institutions in the bond universe

• No change in subscriber rules or benefits

Key conditions remain unchanged

PFRDA has clarified that there are no changes in risk parameters.

The circular states: “All other conditions, including extant credit rating requirements (AA or above) and applicable maturity specifications prescribed under the Investment Guidelines, shall remain unchanged.”

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