NRIs and NPS accounts – opening process and clauses

NRIs and NPS accounts – opening process and clauses

What is National Pension System? It is a fixed contribution pension system launched by the Indian government administered by the Pension Fund Regulatory and Development Authority. Nonresidents between the age group of 18-60, having PAN card or Aadhar card and a bank account can open a NPS account under this scheme online. Once the KYC details are given, either Tier I or Tier II accounts can be opened. By depositing Rs. 500 as an initial contribution a unique Permanent Retirement Account Number will be allocated to the NRI.

Requirements to be fulfilled:

1.An individual within the age limit of 18 to 60 years can open an account under this scheme.

2.Aadhar and PAN number

3.Mobile number registered with Aadhaar.

4.Internet banking service activated for the bank account.

5.Tier II account cannot be opened online.

6.The power of attorney facility is not available. 

How to open NPS account using Aadhaar card for NRIs:

• Go to PFRDA/NPS Trust website and select eNPS.
• Click on ‘Registration’ and select the ‘New Registration’ to initiate the registration process. 
• Choose ‘Non-Resident Indian’ and select type of account ‘Repatriable or Non repatriable.’
• Select the alternative for registering with as ‘Aadhaar’.
• Enter your Passport number and Aadhaar number and click on Generate OTP.
• Click Continue after entering the OTP received on the Aadhaar-registered mobile number.
• For bank authentication in case of Repatriable eNPS, choose a bank from the list of empaneled banks and enter your NRE/NRO account specifics. 
• In case of Non repatriable eNPS account, fill out your bank account details and submit NRE/NRO account details on a self-declaration basis.
• Demographic details and a photograph of yours will be retrieved from the Aadhaar database and uploaded into an online form. Fill in other required details in different sections.
• Enter your name, father’s/mother’s name, Mobile Number and e-mail ID under the head ‘Personal Details.’ Aadhaar will be accepted as proof of identity automatically. Specify your date of birth and choose a proof from the drop-down menu. 
• Click on ‘Generate Acknowledgement No’ and you can either continue or use this Acknowledgement No to enter the details in a different tab later. 
• The address will be retrieved from the Aadhaar database automatically under the head ‘Contact Details’ and displayed which you cannot edit if required. Click on the ‘Save & Proceed’ button to continue. 
• Select your occupation and relevant details from the available option under the head ‘Bank and other Details’. Enter bank account details correctly. You must choose one of the empaneled banks for authentication and submit details of your NRE/ NRO account for a repatriable eNPS NRI account (list of empaneled banks available on www.enps.nsdl.com). Details of any NRE/NRO account of any bank may be entered on a self-declaration basis in the event of a non-repatriable eNPS NRI Account. Click on the “Save & Proceed” button to continue.
• Under the ‘Scheme & Nomination Details ‘section, select the ‘Pension Fund Manager’ and the investment choice (Active or Auto). State the percentage of allocation in different asset classes if you are choosing Active Choice. You have the option of nominating up to three individuals and deciding for their percentage share. Then, click on the ‘Save & Proceed’ button to continue. 
• Next is ‘Photo & Signature Details’ section. It is allowed to submit any other image in place of the Aadhaar database image. Scanned ‘Signature’ and ‘Photograph’ should be uploaded (must be in .jpg format and the size of the image should be between 4kb and 12 kb). Once done, confirm all the details and click on ‘Save & Proceed’ button to continue. 
• Under the ‘Payment Details’ section, make an initial contribution of Rs 500 and you will be redirected to the payment gateway after providing the payment details. 
• After making a successful payment, you will be assigned a Permanent Retirement Account Number (PRAN). The subsequent contributions to a Repatriable eNPS NRI account must be made using the account that was specified during the registration procedure.
• Initial and future contributions to a non-repatriable eNPS NRI account can be made using any mode, including net banking, credit card, and debit card.

Steps to open NPS account for NRIs using PAN Card 

Any Non-Resident Indian citizen between the ages of 18 and 60 who has a PAN card and a bank account with one of the empaneled banks can enroll in the National Pension System online. Note that Tier II accounts would not be permitted for NRIs under eNPS. 

Visit PFRDA/ NPS Trust website and select “eNPS” 

Click on “Registration” and select the “New Registration” option to initiate the registration process. 

Choose ‘Non-Resident Indian (NRI)’ and select type of account ‘Repatriable’ or ‘Non repatriable’. 

Select the alternative for registering with as “PAN”.

Enter your Passport number and PAN Number. 

For Repatriable eNPS A/c OR NonRepatriable eNPS A/c: For bank authentication, choose a bank from the list of empanelled banks and enter your NRE/ NRO account specifics. 

Enter your personal details, contact details, bank and other details, scheme and nomination details, photo & signature details and payment details as stated in the above procedure. After you make a successful payment, you will be assigned a Permanent Retirement Account Number (PRAN). The subsequent contributions can be made using any method, including net banking, credit card, and debit card. 

After finalizing the registration procedure, print the system-generated form, paste your photo, sign and submit it to the CRA within 90 days, otherwise, your account will get frozen.

How to Exit from NPS and Withdrawal Rules for NRIs Under NPS 

After reaching the age of 60, annuitization of at least 40% and a lump sum withdrawal of up to 60% are permitted. Complete withdrawal is permitted if the corpus is less than Rs. 2.00 Lac. Subscribers can invest in the NPS until they reach the age of 70. Fresh contributions are allowed throughout this time of deferment; eligible lump sum withdrawals can be deferred until the age of 70. The purchase of an annuity can also be deferred for a maximum of three years at the time of exit. 

If you leave the NPS before you reach the age of 60, you must choose an annuity of at least 80%; you can take a lump-sum withdrawal of up to 20% of your initial investment; and if your corpus is less than Rs.1.00 Lac, you can withdraw your entire corpus. A nominee can receive 100% of the NPS pension wealth in a lump amount upon the subscriber’s death.

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Krishna Rath is a SEBI Registered Investment Adviser, and since 2015 has been educating netizens on investments and insurance. Krishna is a fee only SEBI RIA and is Odisha's first SEBI RIA. With background in IT, Krishna is changing the advisory space with new innovations in AdvisoryTech.

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