The government has raised the limit of foreign direct investment in pension sector to 49 per cent in line with the FDI cap in the insurance sector.
A press note to this effect was issued by the Department of Industrial Policy and Promotion (DIPP) on Monday.
“In pursuance of the enactment of Insurance Regulatory & Development Authority Act, 2013, government has decided to permit FDI in the pension sector…The decision will take immediate effect,” said the note from the DIPP.
Press notes are official documents issued by DIPP through which new FDI policies or changes in existing ones come into effect.
The FDI cap in the sector has been hiked to 49 per cent and that includes foreign investment in the forms of FPI, FII, QFI, FVCI, NRI and DR.
As per the press note, no government approval is required till 26 per cent. But FIPB nod would be needed for investment beyond 26 per cent and up to the cap of 49 per cent.
All investments in the pension sector, however, will have to abide by the pension sector regulator — PFRDA.
In December last year, through an ordinance the government has allowed 49 per cent FDI. The ordinance was later converted into an Act by Parliament.