PFRDA has slashed the minimum annual contribution in NPS to Rs. 1,000 annually to encourage investors, especially the workers in unorganized sector, to invest in NPS. Also, the regulator has reduced the minimum account balance requirement from Rs. 6,000 to Rs. 2,000.
Earlier, a subscriber had to invest at least Rs. 6,000 per annum to keep the NPS account active.
“With a view to encourage the access of NPS to all segments of the society including the unorganized sector, it has been decided to reduce the requirement of minimum contribution to keep the NPS account active,” states PRDA circular.
Similarly, the regulator has done away with the requirement of maintaining a minimum balance in NPS Tier II accounts. NPS Tier II is a voluntary savings account. This works like an open ended mutual fund scheme where subscribers can invest and withdraw at their will.
Meanwhile, PFRDA has activated all inactive accounts in which subscribers had failed to maintain minimum contribution and balance requirements. That means, these accounts will now turn active. Also, subscribers whose accounts were frozen can now make fresh contributions to their NPS account without paying any penalty.
This has come into effect immediately.