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RBI lists norms for pension funds

MUMBAI: The Reserve Bank of India on Thursday asked banks to form subsidiaries to undertake pension fund management, for which the interim regulator, the Pension Fund Regulatory and Development Authority (PFRDA), was now in the process of finalising the names of two to three entities.

The PFRDA has already laid down eligibility criteria for pension funds that include that the entities have to be public sector units and the average assets under management of the sponsors must not be less than Rs. 10,000 crore for March 2007.

The four entities shortlisted by the PFRDA for managing pension funds of employees of Union and most State governments are State Bank of India, the Life Insurance Corporation of India, IDBI Capital and UTI AMC. Banks will have to seek prior permission of the RBI to enter into the pension fund business, the guidelines issued by the RBI say. Only those banks which have net worth of not less than Rs. 500 crore, credit adequacy ratio of up to 11 per cent in the last three years along with other qualifying parameters could approach the RBI for the purpose. — PTI

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