Nps Account Closure: Pfrda Issues Guidelines For These Pension Accountholders; Check Details

The Pension Fund Regulatory and Development Authority (PFRDA) has outlined circumstantial rules for nan closure of National Pension System (NPS) accounts for subscribers who person renounced Indian citizenship. According to a information issued connected 21 April 2025, affected subscribers who do not clasp an Overseas Citizen of India (OCI) paper must instantly notify nan NPS Trust astir their alteration successful citizenship status. This move requires subscribers to supply impervious of renunciation, aft which their Permanent Retirement Account Number (PRAN) aliases NPS relationship will beryllium closed. Subsequently, nan full accumulated pension wealthiness will beryllium transferred exclusively to nan subscriber’s Non-Resident Ordinary (NRO) account. 

The PFRDA circular, which was issued connected April 21, 2025, stated: “In respect of specified subscribers who person validly renounced their Indian citizenship and do not clasp an OCI card, nan said subscriber is required to forthwith friendly National Pension System Trust (NPS Trust) of nan alteration successful position along-with impervious thereof and PRAN/NPS relationship held by nan subscriber shall beryllium closed and nan full accumulated pension wealthiness whitethorn beryllium transferred to Non-Resident Ordinary (NRO) relationship only.”

The PFRDA has clarified nan steps basal for subscribers to complete this relationship closure process. Subscribers must taxable an exertion for relationship closure, accompanied by a signed declaration confirming their renunciation of Indian citizenship and nan absence of an OCI card.

Essential archiving specified arsenic a certificate of renunciation, a surrender certificate, aliases a cancelled Indian passport issued by a competent authority must besides beryllium provided.

Once these documents are verified, nan NPS Trust and Central Recordkeeping Agencies (CRAs) will facilitate nan closure of nan relationship and transportation nan costs to nan designated NRO relationship successful compliance pinch nan Foreign Exchange Management Act (FEMA) guidelines. 

Renouncing Indian citizenship

Renouncing Indian citizenship is simply a general ineligible process nether Indian law, usually pursued erstwhile an individual acquires citizenship of different country, arsenic India does not licence dual citizenship. This ineligible model is captious for governing nan position of NPS accounts, which tin beryllium opened by Indian citizens, Non-Resident Indians (NRIs), and OCIs. However, circumstantial conditions stipulated by nan PFRDA must beryllium met. In cases wherever citizenship changes, nan NPS relationship must beryllium managed successful accordance pinch nan caller regulatory provisions to guarantee compliance pinch Indian financial and ineligible standards. 

The PFRDA's updated guidelines travel arsenic a basal regulatory measurement to reside situations wherever erstwhile Indian citizens, who person opted for citizenship elsewhere, request to formalise their financial holdings successful India. This process ensures that pension wealthiness accumulated during their tenure arsenic Indian citizens is appropriately managed and transferred successful statement pinch world financial regulations. It besides clarifies nan position of specified accounts for subscribers, ensuring their pension wealthiness is not near successful limbo owed to changes successful citizenship. 

These regulatory changes bespeak nan PFRDA's committedness to maintaining a transparent and compliant financial situation for NPS subscribers. By providing clear guidelines and a system attack for relationship closure and money transfer, nan PFRDA helps guarantee that subscribers' financial interests are safeguarded moreover erstwhile their citizenship position undergoes important changes.

Published on: Apr 23, 2025 7:33 PM IST